STBA 10-Q Quarterly Report June 30, 2024

S&T BANCORP INC

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stba-20240630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________________________________

FORM 10-Q

______________________________________

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 0-12508

______________________________________

S&T BANCORP INC .

(Exact name of registrant as specified in its charter)

______________________________________

Pennsylvania

25-1434426

(State or other jurisdiction of incorporation or organization)

(IRS Employer Identification No.)

800 Philadelphia Street

Indiana

15701

(Address of principal executive offices)

(zip code)

800 - 325-2265

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address, and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $2.50 par value	STBA	NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practical date.

Common Stock, $2.50 Par Value - 38,256,204 shares as of July 31, 2024

Table of Contents

S&T BANCORP, INC. AND SUBSIDIARIES



		Page No.
PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements

	Consolidated Balance Sheets	2

	Condensed Consolidated Statements of Comprehensive Income	3

	Consolidated Statements of Changes in Shareholders' Equity	4

	Condensed Consolidated Statements of Cash Flows	6

	Notes to Consolidated Financial Statements	7

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	29

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	44

Item 4.	Controls and Procedures	45

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	46

Item 1A.	Risk Factors	46

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	46

Item 3.	Defaults Upon Senior Securities	46

Item 4.	Mine Safety Disclosures	46

Item 5.	Other Information	46

Item 6.	Exhibits	47

	Signatures	48

Table of Contents

S&T BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)





	June 30, 2024			December 31, 2023
(in thousands, except share and per share data)	(Unaudited)			(Audited)
ASSETS
Cash and due from banks, including interest-bearing deposits of $ 172,549 and $ 160,802 at June 30, 2024 and December 31, 2023		$	246,310		$	233,612
Securities available for sale, at fair value		977,958			970,391
Loans held for sale		188			153
Portfolio loans, net of unearned income		7,713,570			7,653,341
Allowance for credit losses		( 106,150 )			( 107,966 )
Portfolio loans, net		7,607,420			7,545,375
Bank owned life insurance		84,187			84,008
Premises and equipment, net		46,959			49,006
Federal Home Loan Bank and other restricted stock, at cost		12,056			25,082
Goodwill		373,424			373,424

Other assets		286,960			270,475
Total Assets		$	9,635,462		$	9,551,526
LIABILITIES
Deposits:
Noninterest-bearing demand		$	2,206,589		$	2,221,942
Interest-bearing demand		789,317			825,787
Money market		2,008,486			1,941,842
Savings		906,794			950,546
Certificates of deposit		1,769,150			1,581,652
Total Deposits		7,680,336			7,521,769

Short-term borrowings		275,000			415,000
Long-term borrowings		39,034			39,277
Junior subordinated debt securities		49,388			49,358

Other liabilities		270,261			242,677
Total Liabilities		8,314,019			8,268,081
SHAREHOLDERS’ EQUITY
Common stock ($ 2.50 par value) Authorized— 50,000,000 shares Issued— 41,449,444 shares at June 30, 2024 and December 31, 2023 Outstanding— 38,256,204 shares at June 30, 2024 and 38,232,806 shares at December 31, 2023		103,623			103,623
Additional paid-in capital		409,874			409,034
Retained earnings		999,115			959,604
Accumulated other comprehensive loss		( 93,934 )			( 90,901 )
Treasury stock — 3,193,240 shares at June 30, 2024 and 3,216,638 shares at December 31, 2023, at cost		( 97,235 )			( 97,915 )
Total Shareholders’ Equity		1,321,443			1,283,445
Total Liabilities and Shareholders’ Equity		$	9,635,462		$	9,551,526

See Notes to Consolidated Financial Statements

Table of Contents

S&T BANCORP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)




	Three Months Ended June 30,						Six Months Ended June 30,
(dollars in thousands, except per share data)	2024			2023			2024			2023
INTEREST AND DIVIDEND INCOME
Loans, including fees		$	119,564		$	108,699		$	238,141		$	211,423
Investment Securities:
Taxable		8,761			7,806			17,356			15,263
Tax-exempt		168			215			361			429
Dividends		272			613			661			1,121
Total Interest and Dividend Income		128,765			117,333			256,519			228,236
INTEREST EXPENSE
Deposits		39,629			20,102			76,291			35,005
Borrowings, junior subordinated debt securities and other		5,542			9,108			13,157			16,317
Total Interest Expense		45,171			29,210			89,448			51,322
NET INTEREST INCOME		83,594			88,123			167,071			176,914
Provision for credit losses		422			10,529			3,049			11,451
Net Interest Income After Provision for Credit Losses		83,172			77,594			164,022			165,463
NONINTEREST INCOME
Net loss on sale of securities		( 3,150 )			—			( 3,147 )			—
Debit and credit card		4,713			4,645			8,948			9,018
Service charges on deposit accounts		4,089			3,928			7,917			8,004
Wealth management		2,995			3,185			6,037			6,133
Mortgage banking		254			289			531			590
Other		4,404			2,144			5,849			3,636
Total Noninterest Income		13,305			14,191			26,135			27,381
NONINTEREST EXPENSE
Salaries and employee benefits		30,388			25,391			59,900			52,992
Data processing and information technology		4,215			4,177			9,169			8,435
Occupancy		3,649			3,710			7,519			7,545
Furniture, equipment and software		3,382			3,192			6,854			6,053
Marketing		1,404			1,459			3,347			3,312
Other taxes		1,433			1,322			3,304			3,112
Professional services and legal		1,403			2,069			3,123			3,890
FDIC insurance		1,053			1,032			2,102			2,044
Other		6,681			7,281			12,810			13,949
Total Noninterest Expense		53,608			49,633			108,128			101,332
Income Before Taxes		42,869			42,152			82,029			91,512
Income tax expense		8,498			7,685			16,419			17,246
Net Income		$	34,371		$	34,467		$	65,610		$	74,266
Earnings per share—basic		$	0.90		$	0.89		$	1.72		$	1.92
Earnings per share—diluted		$	0.89		$	0.89		$	1.70		$	1.91
Dividends declared per share		$	0.33		$	0.32		$	0.66		$	0.64
Comprehensive Income		$	38,134		$	17,082		$	62,576		$	72,348

See Notes to Consolidated Financial Statements

Table of Contents

S&T BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

(Unaudited)



	Three Months Ended June 30, 2023
	Common Stock			Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Treasury Stock			Total
Balance at March 31, 2023		$	103,623		$	407,113		$	890,840		$	( 96,658 )		$	( 77,123 )		$	1,227,795
Net income for the three months ended June 30, 2023		—			—			34,467			—			—			34,467
Other comprehensive loss, net of tax		—			—			—			( 17,385 )			—			( 17,385 )

Cash dividends declared ($ 0.32 per share)		—			—			( 12,416 )			—			—			( 12,416 )
Treasury stock issued for restricted stock awards ( 32,041 shares)		—			( 997 )			—			—			997			—
Forfeitures of restricted stock awards ( 48,853 shares)		—			—			1,083			—			( 1,546 )			( 463 )

Repurchase of S&T Stock ( 739,426 shares)		—			—			—			—			( 19,998 )			( 19,998 )
Recognition of restricted stock compensation expense		—			853			—			—			—			853





Balance at June 30, 2023		$	103,623		$	406,969		$	913,974		$	( 114,043 )		$	( 97,670 )		$	1,212,853
See Notes to Consolidated Financial Statements

	Three months ended June 30, 2024
(dollars in thousands, except share and per share data)	Common Stock			Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Treasury Stock			Total
Balance at March 31, 2024		$	103,623		$	409,857		$	977,195		$	( 97,697 )		$	( 97,904 )		$	1,295,074
Net Income for the three months ended June 30,2024		—			—			34,371			—			—			34,371
Other comprehensive income, net of tax		—			—			—			3,763			—			3,763

Cash dividends declared ($ 0.33 per share)		—			—			( 12,672 )			—			—			( 12,672 )
Treasury stock issued for restricted stock awards ( 53,691 shares)		—			( 1,634 )			—			—			1,634			—
Forfeitures of restricted stock awards ( 30,767 shares)		—			—			221			—			( 965 )			( 744 )


Recognition of restricted stock compensation expense		—			1,651			—			—			—			1,651





Balance at June 30, 2024		$	103,623		$	409,874		$	999,115		$	( 93,934 )		$	( 97,235 )		$	1,321,443
See Notes to Consolidated Financial Statements

Table of Contents

S&T BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

(Unaudited)





















	Six Months Ended June 30, 2023
(dollars in thousands, except share and per share data)	Common Stock			Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Treasury Stock			Total
Balance at January 1, 2023		$	103,623		$	406,283		$	863,948		$	( 112,125 )		$	( 77,070 )		$	1,184,659
Net income for the six months ended June 30, 2023		—			—			74,266			—			—			74,266
Other comprehensive loss, net of tax		—			—			—			( 1,918 )			—			( 1,918 )
Impact of adoption of ASU 2022-02		—			—			( 447 )			—			—			( 447 )
Cash dividends declared ($ 0.64 per share)		—			—			( 24,910 )			—			—			( 24,910 )
Treasury stock issued for restricted stock awards ( 32,041 shares)		—			( 997 )			—			—			997			—
Forfeitures of restricted stock awards ( 50,430 shares)		—			—			1,117			—			( 1,599 )			( 482 )

Repurchase of S&T stock ( 739,426 shares)		—			—			—			—			( 19,998 )			( 19,998 )
Recognition of restricted stock compensation expense		—			1,683			—			—			—			1,683





Balance at June 30, 2023		$	103,623		$	406,969		$	913,974		$	( 114,043 )		$	( 97,670 )		$	1,212,853
See Notes to Consolidated Financial Statements

	Six months ended June 30, 2024
(dollars in thousands, except share and per share data)	Common Stock			Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Treasury Stock			Total
Balance at January 1, 2024		$	103,623		$	409,034		$	959,604		$	( 90,901 )		$	( 97,915 )		$	1,283,445
Net income for the six months ended June 30, 2024		—			—			65,610			—			—			65,610
Other comprehensive loss, net of tax		—			—			—			( 3,033 )			—			( 3,033 )
Impact of adoption of ASU 2023-02		—			—			( 1,002 )			—			—			( 1,002 )
Cash dividends declared ($ 0.66 per share)		—			—			( 25,333 )			—			—			( 25,333 )
Treasury stock issued for restricted stock awards ( 55,753 shares)		—			( 1,697 )			—			—			1,697			—
Forfeitures of restricted stock awards ( 32,355 shares)		—			—			236			—			( 1,017 )			( 781 )


Recognition of restricted stock compensation expense		—			2,537			—			—			—			2,537





Balance at June 30, 2024		$	103,623		$	409,874		$	999,115		$	( 93,934 )		$	( 97,235 )		$	1,321,443

See Notes to Consolidated Financial Statements

Table of Contents

S&T BANCORP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)



	Six months ended June 30,

(dollars in thousands)	2024		2023
OPERATING ACTIVITIES






















Net Cash Provided by Operating Activities	$	91,046	$	83,048
INVESTING ACTIVITIES
Purchases of securities	( 123,615 )		( 31,725 )
Proceeds from maturities, prepayments and calls of securities	64,806		61,532
Proceeds from sales of securities	46,733		—

Redemption (purchases) of Federal Home Loan Bank stock	13,026		( 8,236 )
Net increase in loans	( 75,016 )		( 149,109 )
Proceeds from sale of portfolio loans	8,923		8,333
Proceeds from sale of other real estate owned	77		24
Purchases of premises and equipment	( 1,409 )		( 2,687 )
Proceeds from the sale of premises and equipment	27		705
Proceeds from life insurance settlement	784		338
Net payments from cash flow hedge	( 4,910 )		( 5,344 )


Net Cash Used in Investing Activities	( 70,574 )		( 126,169 )
FINANCING ACTIVITIES
Net decrease in demand, money market and savings deposits	( 28,931 )		( 477,313 )
Net increase in certificates of deposit	187,506		398,591
Net (decrease) increase in short-term borrowings	( 140,000 )		160,000
Proceeds from long-term borrowings	—		25,000
Repayments on long-term borrowings	( 243 )		( 228 )

Repurchase of shares for taxes on restricted stock	( 781 )		( 482 )

Cash dividends paid to common shareholders	( 25,325 )		( 24,781 )
Repurchase of common stock	—		( 19,808 )


Net Cash (Used in) Provided by Financing Activities	( 7,774 )		60,979
Net increase in cash and due from banks	12,698		17,858
Cash and due from banks at beginning of period	233,612		210,009
Cash and Due From Banks at End of Period	$	246,310	$	227,867







Supplemental Disclosures



Right of use assets obtained in exchange for lease obligations	$	—	$	1,846
Cash paid for interest	$	82,646	$	41,359
Cash paid for income taxes, net of refunds	$	9,650	$	23,625


Transfers of loans to other real estate owned	$	113	$	29

See Notes to Consolidated Financial Statements

Table of Contents

S&T BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. BASIS OF PRESENTATION

Principles of Consolidation

The interim Consolidated Financial Statements include the accounts of S&T Bancorp, Inc., or S&T, and its wholly owned subsidiaries. All significant intercompany transactions have been eliminated in consolidation. Investments of 20 percent to 50 percent of the outstanding common stock of investees are accounted for using the equity method of accounting.

Basis of Presentation

The accompanying unaudited interim Consolidated Financial Statements of S&T have been prepared in accordance with generally accepted accounting principles, or GAAP, in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the audited Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission, or SEC, on February 27, 2024 (2023 Form 10-K). In the opinion of management, the accompanying interim financial information reflects all adjustments, consisting of normal recurring adjustments, necessary to present fairly our financial position and the results of operations for each of the interim periods presented. Results of operations for interim periods are not necessarily indicative of the results of operations that may be expected for a full year or any future period.

Reclassification

A mounts in prior period financial statements and footnotes are reclassified whenever necessary to conform to the current period presentation. Reclassifications had no effect on our consolidated financial statements.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates.

Recently Adopted Accounting Standards

Investments Equity Method and Joint Ventures (Topic 323) Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method

In March 2023, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, 2023-02, Investments Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method, or PAM, to allow reporting entities to consistently account for equity investments made primarily for the purpose of receiving income tax credits and other income tax benefits. If certain conditions are met, a reporting entity may elect to account for its tax equity investments using the PAM regardless of the program from which it receives income tax credits, instead of only using it for low-income-housing tax credit, or LIHTC, structures. This amendment also eliminates the ability to account for LIHTC investments using the cost method. The amendments in this update are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. We adopted this ASU, as of January 1, 2024, using a modified retrospective transition approach, which resulted in a $ 1.0 million cumulative effect adjustment being recorded to retained earnings related to the transition of the cost method to the PAM on LIHTC partnerships. We also elected to apply PAM to our qualifying historic tax credit, or HTC, equity investments. Results for reporting periods beginning after January 1, 2024 are presented using the PAM, while prior period amounts continue to be reported in accordance with previously applicable GAAP. Under the previously applicable accounting guidance, tax credit investments were accounted for using the cost method. The investment was amortized on a straight-line basis over a maximum of 10 years, which represents the period over which the tax credits will be utilized. The amortization expense was recognized in other noninterest expense and the tax credits offset income tax expense. Under the PAM, the equity investment is amortized in proportion to the income tax credits and other income tax benefits received. The amortization expense and the income tax credits are required to be presented on a net basis in income tax expense on the Condensed Consolidated Statements of Comprehensive Income. Refer to Note 7 Tax Credit Equity Investments for additional disclosures.

Table of Contents

S&T BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Recently Issued Accounting Standards Not Yet Adopted

Segment Reporting (Topic 280) Improvements to Reportable Segment Disclosures

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures to improve disclosure requirements, primarily through enhanced disclosures about significant segment expenses. This update does not change how a public entity identifies its operating segments; however, it does require that an entity that has a single reportable segment provide all the disclosures required by the amendments in this update. The amendments in this update are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. A public entity should apply the amendments in this update retrospectively to all prior periods presented in the consolidated financial statements. Early adoption is permitted. We currently have one reportable operating segment, Community Banking. This ASU will not impact our consolidated financial statements and will have minimal impact to our disclosures, requiring identification of the chief operating decision maker and the information used to make operating decisions and to allocate resources.

Income Taxes (Topic 740) Improvements to Income Tax Disclosures

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures to enhance the transparency and decision usefulness of the disclosures. The amendments in this update address investor requests for more transparency about income tax information through improvements to disclosures primarily related to the rate reconciliation and income taxes paid information. The amendments in this update are effective for fiscal years beginning after December 15, 2024. Early adoption is permitted for annual consolidated financial statements that have not yet been issued. This ASU is not expected to have a significant impact on disclosures, and will not impact our consolidated financial statements.

NOTE 2. EARNINGS PER SHARE

Diluted EPS is calculated using both the two-class and the treasury stock methods with the more dilutive method used to determine diluted EPS. The treasury stock method was used to determine EPS for the three and six months ended June 30, 2024 and the two-class method was used to determined EPS for the three and six months ended June 30, 2023.

The following table reconciles the numerators and denominators of basic and diluted EPS calculations for the periods presented:


	Three months ended June 30,						Six months ended June 30,
(in thousands, except share and per share data)	2024			2023			2024			2023
Numerator for Earnings per Share—Basic and Diluted:
Net income		$	34,371		$	34,467		$	65,610		$	74,266
Less: Income allocated to participating shares		—			33			10			107
Net Income Allocated to Shareholders		$	34,371		$	34,434		$	65,600		$	74,159















Denominator for Earnings per Share—Treasury Stock Method:
Weighted Average Shares Outstanding—Basic		38,243,859			38,510,772			38,217,944			38,687,342
Add: Potentially dilutive shares		287,833			131,886			277,678			175,013
Denominator for Treasury Stock Method—Diluted		38,531,692			38,642,658			38,495,622			38,862,355

Denominator for Earnings per Share—Two-Class Method:
Weighted Average Shares Outstanding—Basic		38,243,859			38,510,772			38,217,944			38,687,342
Add: Average participating shares outstanding		287,833			103,250			271,338			134,544
Denominator for Two-Class Method—Diluted		38,531,692			38,614,022			38,489,282			38,821,886


Earnings per share—basic		$	0.90		$	0.89		$	1.72		$	1.92
Earnings per share—diluted		$	0.89		$	0.89		$	1.70		$	1.91

Restricted stock considered anti-dilutive excluded from potentially dilutive shares		323			3,331			181			1,849

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S&T BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3. FAIR VALUE MEASUREMENTS

We use fair value measurements when recording and disclosing certain financial assets and liabilities. Debt securities, equity securities, securities held in a deferred compensation plan and derivative financial instruments are recorded at fair value on a recurring basis. Additionally, from time to time, we may be required to record other financial instruments at fair value on a nonrecurring basis, such as loans held for sale, individually assessed loans, other real estate owned, or OREO, and other repossessed assets, mortgage servicing rights, or MSRs, and certain other assets.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants at the measurement date. An orderly transaction is a transaction that assumes exposure to the market for a period prior to the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets or liabilities; it is not a forced transaction. In determining fair value, we use various valuation approaches, including market, income and cost approaches. The fair value standard establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing an asset or liability, which are developed based on market data that we have obtained from independent sources. Unobservable inputs reflect our estimates of assumptions that market participants would use in pricing an asset or liability, which are developed based on the best information available in the circumstances.

The fair value hierarchy gives the highest priority to unadjusted quoted market prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The fair value hierarchy is broken down into three levels based on the reliability of inputs as follows.

Level 1: valuation is based upon unadjusted quoted market prices for identical instruments traded in active markets.

Level 2: valuation is based upon quoted market prices for similar instruments traded in active markets, quoted market prices for identical or similar instruments traded in markets that are not active and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by market data.

Level 3: valuation is derived from other valuation methodologies, including discounted cash flow models and similar techniques that use significant assumptions not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in determining fair value.

A financial instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

There have been no changes in our valuation methodologies during the three and six months ended June 30, 2024. Refer to Note 1 Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements in our 2023 Form 10-K for more information on the valuation methodologies that we use for financial instruments recorded at fair value on a recurring or nonrecurring basis.

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S&T BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Assets and Liabilities Recorded at Fair Value on a Recurring Basis

The following tables present our assets and liabilities that are measured at fair value on a recurring basis by fair value hierarchy level at the dates presented:


	June 30, 2024
(dollars in thousands)	Level 1		Level 2		Level 3		Total
ASSETS
Available-for-sale debt securities:
U.S. Treasury securities	$	113,449	$	—	$	—	$	113,449
Obligations of U.S. government corporations and agencies	—		24,786		—		24,786
Collateralized mortgage obligations of U.S. government corporations and agencies	—		519,325		—		519,325
Residential mortgage-backed securities of U.S. government corporations and agencies	—		35,298		—		35,298
Commercial mortgage-backed securities of U.S. government corporations and agencies	—		256,540		—		256,540

Obligations of states and political subdivisions	—		24,441		—		24,441
Total Available-for-Sale Debt Securities	113,449		860,390		—		973,839
Equity securities	4,119		—		—		4,119
Total Securities Available for Sale	117,568		860,390		—		977,958
Securities held in a deferred compensation plan	10,503		—		—		10,503
Derivative financial assets:
Interest rate swaps - commercial loans	—		70,313		—		70,313



Total Assets	$	128,071	$	930,703	$	—	$	1,058,774
LIABILITIES
Derivative financial liabilities:
Interest rate swaps - commercial loans	$	—	$	70,765	$	—	$	70,765


Interest rate swaps - cash flow hedge	—		17,156		—		17,156
Total Liabilities	$	—	$	87,921	$	—	$	87,921


	December 31, 2023
(dollars in thousands)	Level 1		Level 2		Level 3		Total
ASSETS
Available-for-sale debt securities:
U.S. Treasury securities	$	133,786	$	—	$	—	$	133,786
Obligations of U.S. government corporations and agencies	—		32,513		—		32,513
Collateralized mortgage obligations of U.S. government corporations and agencies	—		460,939		—		460,939
Residential mortgage-backed securities of U.S. government corporations and agencies	—		38,177		—		38,177
Commercial mortgage-backed securities of U.S. government corporations and agencies	—		273,425		—		273,425

Obligations of states and political subdivisions	—		30,468		—		30,468
Total Available-for-Sale Debt Securities	133,786		835,522		—		969,308
Equity securities	1,010		73		—		1,083
Total Securities Available for Sale	134,796		835,595		—		970,391
Securities held in a deferred compensation plan	9,399		—		—		9,399
Derivative financial assets:
Interest rate swaps - commercial loans	—		63,018		—		63,018



Total Assets	$	144,195	$	898,613	$	—	$	1,042,808
LIABILITIES
Derivative financial liabilities:
Interest rate swaps - commercial loans	$	—	$	63,554	$	—	$	63,554

Interest rate swaps - cash flow hedge	—		14,739		—		14,739
Total Liabilities	$	—	$	78,293	$	—	$	78,293

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S&T BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Assets Recorded at Fair Value on a Nonrecurring Basis

We may be required to measure certain assets and liabilities at fair value on a nonrecurring basis. Nonrecurring assets are recorded at the lower of cost or fair value in our consolidated financial statements. There were no liabilities measured at fair value on a nonrecurring basis at either June 30, 2024 or December 31, 2023. There were no assets measured at fair value on a nonrecurring basis as of June 30, 2024 and one Level 2 individually assessed loan measured at fair value on a nonrecurring basis as of December 31, 2023 for $ 5.9 million.

Fair Value of Financial Instruments

The following tables present the carrying values and fair values of our financial instruments at the dates presented:


	Carrying Value (1)		Fair Value Measurements at June 30, 2024
(dollars in thousands)			Total		Level 1		Level 2		Level 3
ASSETS
Cash and due from banks, including interest-bearing deposits	$	246,310	$	246,310	$	246,310	$	—	$	—
Securities available for sale	977,958		977,958		117,568		860,390		—
Loans held for sale	188		188		—		188		—
Portfolio loans, net	7,607,420		7,306,637		—		—		7,306,637
Collateral receivable	6,265		6,265		6,265		—		—
Securities held in a deferred compensation plan	10,503		10,503		10,503		—		—
Mortgage servicing rights	5,972		8,664		—		—		8,664
Interest rate swaps - commercial loans	70,313		70,313		—		70,313		—



LIABILITIES
Deposits	$	7,680,336	$	7,669,604	$	5,911,186	$	1,758,418	$	—
Collateral payable	56,680		56,680		56,680		—		—

Short-term borrowings	275,000		274,593		—		274,593		—
Long-term borrowings	39,034		38,881		—		38,881		—
Junior subordinated debt securities	49,388		49,388		—		49,388		—
Interest rate swaps - commercial loans	70,765		70,765		—		70,765		—
Interest rate swaps - cash flow hedge	17,156		17,156		—		17,156		—


(1) As reported in the Consolidated Balance Sheets


	Carrying Value (1)		Fair Value Measurements at December 31, 2023
(dollars in thousands)			Total		Level 1		Level 2		Level 3
ASSETS
Cash and due from banks, including interest-bearing deposits	$	233,612	$	233,612	$	233,612	$	—	$	—
Securities available for sale	970,391		970,391		134,796		835,595		—
Loans held for sale	153		153		—		153		—
Portfolio loans, net	7,545,375		7,263,270		—		—		7,263,270
Collateral receivable	5,356		5,356		5,356		—		—
Securities held in a deferred compensation plan	9,399		9,399		9,399		—		—
Mortgage servicing rights	6,345		8,704		—		—		8,704
Interest rate swaps - commercial loans	63,018		63,018		—		63,018		—


LIABILITIES
Deposits	$	7,521,769	$	7,511,598	$	5,940,117	$	1,571,481	$	—
Collateral payable	50,920		50,920		50,920		—		—

Short-term borrowings	415,000		415,000		—		415,000		—
Long-term borrowings	39,277		38,995		—		38,995		—
Junior subordinated debt securities	49,358		49,358		—		49,358		—
Interest rate swaps - commercial loans	63,554		63,554		—		63,554		—
Interest rate swaps - cash flow hedge	14,739		14,739		—		14,739		—

(1) As reported in the Consolidated Balance Sheets

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S&T BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4. SECURITIES

The following table presents the fair values of our securities portfolio at the dates presented:


(dollars in thousands)	June 30, 2024		December 31, 2023
Debt securities	$	973,839	$	969,308
Equity securities		4,119		1,083
Total Securities Available for Sale	$	977,958	$	970,391

The following table presents the amortized cost and fair value of available-for-sale debt securities as of the dates presented:


	June 30, 2024												December 31, 2023
(dollars in thousands)	Amortized Cost			Gross Unrealized Gains			Gross Unrealized Losses			Fair Value			Amortized Cost			Gross Unrealized Gains			Gross Unrealized Losses			Fair Value
U.S. Treasury securities		$	123,296		$	—		$	( 9,847 )		$	113,449		$	144,292		$	—		$	( 10,506 )		$	133,786
Obligations of U.S. government corporations and agencies		25,310			—			( 524 )			24,786			33,342			—			( 829 )			32,513
Collateralized mortgage obligations of U.S. government corporations and agencies		569,806			342			( 50,823 )			519,325			507,942			1,068			( 48,071 )			460,939
Residential mortgage-backed securities of U.S. government corporations and agencies		42,301			2			( 7,005 )			35,298			44,707			7			( 6,537 )			38,177
Commercial mortgage-backed securities of U.S. government corporations and agencies		272,741			124			( 16,325 )			256,540			290,775			458			( 17,808 )			273,425

Obligations of states and political subdivisions		25,017			—			( 576 )			24,441			30,255			213			—			30,468
Total Available-for-Sale Debt Securities (1)		$	1,058,471		$	468		$	( 85,100 )		$	973,839		$	1,051,313		$	1,746		$	( 83,751 )		$	969,308

(1) Excludes interest receivable of $ 3.8 million at June 30, 2024 and $ 3.8 million at December 31, 2023. Interest receivable is included in other assets in the Consolidated Balance Sheets.

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S&T BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following tables present the fair value and the age of gross unrealized losses on available-for-sale debt securities by investment category as of the dates presented:


	June 30, 2024
	Less Than 12 Months					12 Months or More					Total
(dollars in thousands)	Number of Securities	Fair Value		Unrealized Losses		Number of Securities	Fair Value		Unrealized Losses		Number of Securities	Fair Value		Unrealized Losses
U.S. Treasury securities	—	$	—	$	—	12	$	113,449	$	( 9,847 )	12	$	113,449	$	( 9,847 )
Obligations of U.S. government corporations and agencies	—	—		—		4	24,786		( 524 )		4	24,786		( 524 )
Collateralized mortgage obligations of U.S. government corporations and agencies	11	108,262		( 893 )		60	357,948		( 49,930 )		71	466,210		( 50,823 )
Residential mortgage-backed securities of U.S. government corporations and agencies	11	69		—		14	35,057		( 7,005 )		25	35,126		( 7,005 )
Commercial mortgage-backed securities of U.S. government corporations and agencies	3	30,145		( 253 )		24	202,566		( 16,072 )		27	232,711		( 16,325 )
Obligations of states and political subdivisions	4	24,441		( 576 )		—	—		—		4	24,441		( 576 )


Total	29	$	162,917	$	( 1,722 )	114	$	733,806	$	( 83,378 )	143	$	896,723	$	( 85,100 )


	December 31, 2023
	Less Than 12 Months					12 Months or More					Total
(dollars in thousands)	Number of Securities	Fair Value		Unrealized Losses		Number of Securities	Fair Value		Unrealized Losses		Number of Securities	Fair Value		Unrealized Losses
U.S. Treasury securities	1	$	10,036	$	( 52 )	13	$	123,750	$	( 10,454 )	14	$	133,786	$	( 10,506 )
Obligations of U.S. government corporations and agencies	—	—		—		5	32,513		( 829 )		5	32,513		( 829 )
Collateralized mortgage obligations of U.S. government corporations and agencies	4	35,161		( 318 )		57	351,220		( 47,753 )		61	386,381		( 48,071 )
Residential mortgage-backed securities of U.S. government corporations and agencies	10	100		( 1 )		14	37,877		( 6,536 )		24	37,977		( 6,537 )
Commercial mortgage-backed securities of U.S. government corporations and agencies	—	—		—		29	249,005		( 17,808 )		29	249,005		( 17,808 )



Total	15	$	45,297	$	( 371 )	118	$	794,365	$	( 83,380 )	133	$	839,662	$	( 83,751 )

We evaluate securities with unrealized losses quarterly to determine if the decline in fair value has resulted from credit impairment or other factors. We do not believe any individual unrealized loss as of June 30, 2024 represents a credit impairment. There were 143 debt securities in an unrealized loss position at June 30, 2024 and 133 debt securities in an unrealized loss position at December 31, 2023. The unrealized losses on debt securities were attributable to changes in interest rates and not related to the credit quality of the issuers. All debt securities were determined to be investment grade and paying principal and interest according to the contractual terms of the security. At June 30, 2024, we do not intend to sell, and it is more likely than not that we will not be required to sell, the securities in an unrealized loss position before recovery of their amortized cost.

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S&T BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table presents net unrealized gains and losses, net of tax, on available-for-sale debt securities included in accumulated other comprehensive income (loss), for the periods presented:


	June 30, 2024						December 31, 2023
(dollars in thousands)	Gross Unrealized Gains		Gross Unrealized Losses		Net Unrealized Losses		Gross Unrealized Gains		Gross Unrealized Losses		Net Unrealized Losses
Total unrealized gains (losses) on available-for-sale debt securities	$	468	$	( 85,100 )	$	( 84,632 )	$	1,746	$	( 83,751 )	$	( 82,005 )
Income tax (expense) benefit	( 101 )		18,329		18,228		( 372 )		17,824		17,452
Net Unrealized Gains (Losses), Net of Tax Included in Accumulated Other Comprehensive Income (Loss)	$	367	$	( 66,771 )	$	( 66,404 )	$	1,374	$	( 65,927 )	$	( 64,553 )

The amortized cost and fair value of available-for-sale debt securities at June 30, 2024 by contractual maturity are included in the table below. Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.


	June 30, 2024
(dollars in thousands)	Amortized Cost		Fair Value
Obligations of the U.S. Treasury, U.S. government corporations and agencies and obligations of states and political subdivisions
Due in one year or less	$	15,006	$	14,866
Due after one year through five years	136,217		125,958
Due after five years through ten years	22,400		21,852
Due after ten years	—		—
Available-for-Sale Debt Securities With Fixed Maturities	173,623		162,676
Debt Securities without a single maturity date
Collateralized mortgage obligations of U.S. government corporations and agencies	569,806		519,325
Residential mortgage-backed securities of U.S. government corporations and agencies	42,301		35,298
Commercial mortgage-backed securities of U.S. government corporations and agencies	272,741		256,540


Total Available-for-Sale Debt Securities	$	1,058,471	$	973,839

Debt securities are pledged in order to meet various regulatory and legal requirements. Restricted pledged securities had a carrying value of $ 189.6 million at June 30, 2024 and $ 18.4 million at December 31, 2023. Unrestricted pledged securities had a carrying value of $ 214.3 million at June 30, 2024 and $ 214.0 million at December 31, 2023. Any changes to restricted pledged securities require approval of the pledge beneficiary. Approval is not required for unrestricted pledged securities.

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S&T BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5. LOANS AND ALLOWANCE FOR CREDIT LOSSES

Loans and Loans Held for Sale

Loans are presented net of unearned income. Unearned income consisted of net deferred loan fees and costs of $ 5.4 million at June 30, 2024 and $ 6.6 million at December 31, 2023 and a discount related to purchase accounting fair value adjustments of $ 2.7 million at June 30, 2024 and $ 3.1 million at December 31, 2023.

The following table summarizes the composition of originated and acquired loans as of the dates presented:


(dollars in thousands)	June 30, 2024		December 31, 2023
Commercial real estate	$	2,672,527	$	2,659,135
Commercial and industrial	1,421,955		1,436,183
Commercial construction	367,687		350,583
Business banking	1,308,985		1,360,765
Consumer real estate	1,839,756		1,731,778
Other consumer	102,660		114,897
Total Portfolio Loans	$	7,713,570	$	7,653,341
Loans held for sale	188		153
Total Loans (1)	$	7,713,758	$	7,653,494

(1) Excludes interest receivable of $ 35.4 million at June 30, 2024 and $ 35.3 million at December 31, 2023. Interest receivable is included in other assets in the Consolidated Balance Sheets.

Modifications to Borrowers Experiencing Financial Difficulty

The following tables present the amortized cost of loans to borrowers experiencing financial difficulty by portfolio segment and type of modification during the periods presented:



	Three Months Ended June 30, 2024
(dollars in thousands)	Term Extension		Payment Delays (Other Than Insignificant)		Total		% of Portfolio Segment
Commercial real estate	$	3,358	$	—	$	3,358	0.13	%
Commercial and industrial	9,090		12,339		21,429		1.51	%


Consumer real estate	107		—		107		0.01	%

Total (1)	$	12,555	$	12,339	$	24,894	0.32	%
(1) Excludes loans that were fully paid off or fully charged-off by period end.

	Three Months Ended June 30, 2023
(dollars in thousands)	Term Extension		Payment Delays (Other Than Insignificant)		Total		% of Portfolio Segment
Commercial real estate	$	1,286	$	—	$	1,286	0.05	%
Commercial and industrial	5,193		—		5,193		0.36	%
Commercial construction	1,621		—		1,621		0.46	%
Business banking	1,033		—		1,033		0.08	%


Total (1)	$	9,133	$	—	$	9,133	0.12	%
(1) Excludes loans that were fully paid off or fully charged-off by period end.

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S&T BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



	Six Months Ended June 30, 2024
(dollars in thousands)	Term Extension		Payment Delays (Other Than Insignificant)		Term Extension and Interest Rate Reduction		Total		% of Portfolio Segment
Commercial real estate	$	4,188	$	—	$	—	$	4,188	0.16	%
Commercial and industrial	9,090		12,339		—		21,429		1.51	%


Consumer real estate	107		—		—		107		0.01	%

Total (1)	$	13,385	$	12,339	$	—	$	25,724	0.33	%
(1) Excludes loans that were fully paid off or fully charged-off by period end.

	Six Months Ended June 30, 2023
(dollars in thousands)	Term Extension		Payment Delays (Other Than Insignificant)		Term Extension and Interest Rate Reduction		Total		% of Portfolio Segment
Commercial real estate	$	14,932	$	—	$	—	$	14,932	0.58	%
Commercial and industrial	5,762		—		—		5,762		0.40	%
Commercial construction	1,621		—		—		1,621		0.46	%
Business banking	1,033		—		—		1,033		0.08	%
Consumer real estate	62		—		194		256		0.02	%

Total (1)	$	23,410	$	—	$	194	$	23,604	0.32	%
(1) Excludes loans that were fully paid off or fully charged-off by period end.

The following tables describe the effect of loan modifications made to borrowers experiencing financial difficulty during the periods presented:



	Three Months Ended June 30, 2024			Six Months Ended June 30, 2024
	Weighted-Average Term Extension (in Months)		Weighted-Average Payment Deferral (in Months)		Weighted-Average Term Extension (in months)	Weighted-Average Payment Deferral (in Months)
Commercial real estate		8		—		8	—
Commercial and industrial		10		6		10	6

Business banking		—		—		19	—
Consumer real estate		68		—		68	—



	Three Months Ended June 30, 2023				Six Months Ended June 30, 2023
	Weighted-Average Term Extension (in Months)		Weighted-Average Interest Rate Reduction			Weighted-Average Term Extension (in months)		Weighted-Average Interest Rate Reduction
Commercial real estate		9		—			7		—
Commercial and industrial		3		—			9		—
Commercial construction		5		—			5		—
Business banking		5		—			5		—
Consumer real estate		—		—			168		2 %

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S&T BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

We closely monitor the performance of the loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of the modification efforts.

The following tables present the aging analysis of modifications to borrowers experiencing financial difficulty in the last 12 months as of the date presented:


	June 30, 2024
(dollars in thousands)	Current		30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due		Total
Commercial real estate	$	4,188	$	—	$	—	$	—	$	4,188
Commercial and industrial	21,429		—		—		—		21,429

Business banking	110		—		—		—		110
Consumer real estate	107		—		—		—		107
Other consumer	$	—	$	—	$	—	$	—	$	—
Total	$	25,834	$	—	$	—	$	—	$	25,834


	June 30, 2023
(dollars in thousands)	Current		30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due		Total
Commercial real estate	$	14,932	$	—	$	—	$	—	$	14,932
Commercial and industrial	5,762		—		—		—		5,762
Commercial construction	1,621		—		—		—		1,621
Business banking	1,033		—		—		—		1,033
Consumer real estate	256		—		—		—		256

Total	$	23,604	$	—	$	—	$	—	$	23,604

A payment default is defined as a loan having a payment past due 90 days or more. There were no payment defaults during the three and six months ended June 30, 2024 related to loans that were modified within the 12 months prior to default. Additionally, we had three commitments to lend an additional $ 1.2 million to borrowers experiencing financial difficulty that had a modification during the six months ended June 30, 2024 and one commitment to lend an additional $ 0.2 million to borrowers experiencing financial difficulty that had a modification during the same period in 2023.

The effect of modifications made to borrowers experiencing financial difficulty is already included in the ACL because of the measurement methodologies used to estimate the ACL, therefore, a change to the ACL is generally not recorded upon modification. If principal forgiveness is provided, that portion of the loan will be charged-off, resulting in a reduction of the amortized cost basis and a corresponding adjustment to the ACL. An assessment of whether the borrower is experiencing financial difficulty is made on the date of a modification.

The following table is a summary of nonperforming assets as of the dates presented:


	Nonperforming Assets
(dollars in thousands)	June 30, 2024			December 31, 2023
Nonperforming Assets
Nonaccrual Loans		$	34,857		$	22,947
OREO		95			75
Total Nonperforming Assets		$	34,952		$	23,022

Allowance for Credit Losses

We maintain an Allowance for Credit Losses, or ACL, at a level determined to be adequate to absorb estimated expected credit losses within the loan portfolio over the contractual life of an instrument that considers our historical loss experience, current conditions and forecasts of future economic conditions as of the balance sheet date. We develop and document a systematic ACL methodology based on the following portfolio segments: 1) CRE, 2) C&I, 3) Commercial Construction, 4) Business Banking, 5) Consumer Real Estate and 6) Other Consumer.

The following are key risks within each portfolio segment:

Table of Contents

S&T BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

CRE —Loans secured by commercial purpose real estate, including both owner-occupied properties and investment properties for various purposes such as hotels, retail, multifamily and health care. Operations of the individual projects and global cash flows of the debtors are the primary sources of repayment for these loans. The condition of the local economy is an important indicator of risk, but there are also more specific risks depending on the collateral type and the business prospects of the lessee, if the project is not owner-occupied.

C&I —Loans made to operating companies or manufacturers for the purpose of production, operating capacity, accounts receivable, inventory or equipment financing. Cash flow from the operations of the company is the primary source of repayment for these loans. The condition of the local economy is an important indicator of risk, but there are also more specific risks depending on the industry of the company. Collateral for these types of loans often does not have sufficient value in a distressed or liquidation scenario to satisfy the outstanding debt.

Commercial Construction —Loans made to finance construction of buildings or other structures, as well as to finance the acquisition and development of raw land for various purposes. While these loans are generally confined to the construction/development period, if there are problems, the project may not be completed, and as such, may not provide sufficient cash flow on its own to service the debt or have sufficient value in a liquidation to cover the outstanding principal. The condition of the local economy is an important indicator of risk, but there are also more specific risks depending on the type of project and the experience and resources of the developer.

Business Banking —Commercial purpose loans made to small businesses that are standard, non-complex products evaluated through a streamlined credit approval process that has been designed to maximize efficiency while maintaining high credit quality standards that meet small business market customers’ needs. The business banking portfolio is monitored by utilizing a standard and closely managed process focusing on behavioral and performance criteria. The condition of the local economy is an important indicator of risk, but there are also more specific risks depending on the collateral type and business.

Consumer Real Estate —Loans secured by first and second liens such as 1-4 family residential mortgages, home equity loans and home equity lines of credit. The primary source of repayment for these loans is the income and assets of the borrower. The condition of the local economy, in particular the unemployment rate, is an important indicator of risk for this segment. The state of the local housing market can also have a significant impact on this segment because low demand and/or declining home values can limit the ability of borrowers to sell a property and satisfy the debt.

Other Consumer —Loans made to individuals that may be secured by assets other than 1-4 family residences, as well as unsecured loans. This segment includes auto loans, unsecured loans and lines of credit. The primary source of repayment for these loans is the income and assets of the borrower. The condition of the local economy, in particular the unemployment rate, is an important indicator of risk for this segment. The value of the collateral, if there is any, is less likely to be a source of repayment due to less certain collateral values.

Management monitors various credit quality indicators for the commercial, business banking and consumer loan portfolios, including changes in risk ratings, nonperforming status and delinquency on a monthly basis.

We monitor the commercial loan portfolio through an internal risk rating system. Loan risk ratings are assigned based upon the creditworthiness of the borrower and are reviewed on an ongoing basis according to our internal policies. Loans within the pass rating generally have a lower risk of loss than loans risk rated as special mention or substandard.

Our risk ratings are consistent with regulatory guidance and are as follows:

Pass —The loan is currently performing and is of high quality.

Special Mention —A special mention loan has potential weaknesses that warrant management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects or in the strength of our credit position at some future date.

Substandard —A substandard loan is not adequately protected by the net worth and/or paying capacity of the borrower or by the collateral pledged, if any. Substandard loans have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. These loans are characterized by the distinct possibility that we will sustain some loss if the deficiencies are not corrected.

Doubtful —Loans classified doubtful have all the weaknesses inherent in those classified substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently known facts, conditions and values, highly questionable and improbable.

Table of Contents

S&T BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following tables present loan balances by year of origination and internally assigned risk rating for our portfolio segments as of the dates presented:


	June 30, 2024
	Risk Rating
(dollars in thousands)	2024		2023		2022		2021		2020		2019 and Prior		Revolving		Revolving-Term		Total

Commercial Real Estate
Pass	$	48,148	$	278,373	$	372,544	$	445,786	$	220,620	$	1,139,806	$	30,627	$	—	$	2,535,904
Special mention	—		—		410		5,971		—		65,786		—		—		72,167
Substandard	—		—		994		—		2,306		59,171		—		—		62,471
Doubtful	—		—		—		—		—		1,985		—		—		1,985
Total Commercial Real Estate	48,148		278,373		373,948		451,757		222,926		1,266,748		30,627		—		2,672,527
Year-to-date Gross Charge-offs	—		—		—		—		—		5,205		—		—		5,205

Commercial and Industrial
Pass	33,631		176,156		219,464		155,849		47,484		220,218		479,939		—		1,332,741
Special mention	346		1,161		865		9,117		—		10,585		20,273		—		42,347
Substandard	—		51		213		13,646		1,404		5,540		24,376		—		45,230
Doubtful	—		79		—		208		—		—		1,350		—		1,637
Total Commercial and Industrial	33,977		177,447		220,542		178,820		48,888		236,343		525,938		—		1,421,955
Year-to-date Gross Charge-offs	—		—		—		1,037		—		91		—		—		1,128

Commercial Construction
Pass	31,952		110,187		124,661		67,115		14,490		3,890		10,432		—		362,727
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		4,960		—		—		4,960
Doubtful	—		—		—		—		—		—		—		—		—
Total Commercial Construction	31,952		110,187		124,661		67,115		14,490		8,850		10,432		—		367,687
Year-to-date Gross Charge-offs	—		—		—		—		—		—		—		—		—

Business Banking
Pass	77,648		248,290		231,668		181,439		81,031		372,885		92,690		1,075		1,286,726
Special mention	—		150		52		64		286		4,206		25		280		5,063
Substandard	—		1,907		935		3,618		514		9,628		104		490		17,196
Doubtful	—		—		—		—		—		—		—		—		—
Total Business Banking	77,648		250,347		232,655		185,121		81,831		386,719		92,819		1,845		1,308,985
Year-to-date Gross Charge-offs	—		—		—		—		6		188		—		—		194

Consumer Real Estate
Pass	110,596		334,745		328,326		141,990		98,294		240,448		551,585		24,313		1,830,297
Special mention	—		—		—		—		—		106		—		—		106
Substandard	—		473		420		195		160		4,575		882		2,648		9,353
Doubtful	—		—		—		—		—		—		—		—		—
Total Consumer Real Estate	110,596		335,218		328,746		142,185		98,454		245,129		552,467		26,961		1,839,756
Year-to-date Gross Charge-offs	—		—		—		—		9		23		17		422		471

Other Consumer
Pass	5,088		8,579		9,429		4,765		2,649		807		66,860		4,270		102,447
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		27		11		161		—		14		213
Doubtful	—		—		—		—		—		—		—		—		—
Total Other Consumer	5,088		8,579		9,429		4,792		2,660		968		66,860		4,284		102,660
Year-to-date Gross Charge-offs	434		11		100		46		19		12		—		164		786

Pass	307,063		1,156,330		1,286,092		996,944		464,568		1,978,054		1,232,133		29,658		7,450,842
Special mention	346		1,311		1,327		15,152		286		80,683		20,298		280		119,683
Substandard	—		2,431		2,562		17,486		4,395		84,035		25,362		3,152		139,423
Doubtful	—		79		—		208		—		1,985		1,350		—		3,622
Total Loan Balance	$	307,409	$	1,160,151	$	1,289,981	$	1,029,790	$	469,249	$	2,144,757	$	1,279,143	$	33,090	$	7,713,570

Year-to-date Gross Charge-offs	$	434	$	11	$	100	$	1,083	$	34	$	5,519	$	17	$	586	$	7,784

Table of Contents

S&T BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


	December 31, 2023
	Risk Rating
(dollars in thousands)	2023		2022		2021		2020		2019		2018 and Prior		Revolving		Revolving-Term		Total

Commercial Real Estate
Pass	$	276,677	$	323,463	$	433,308	$	237,901	$	383,799	$	781,465	$	32,418	$	—	$	2,469,031
Special mention	—		1,006		6,000		—		24,887		75,428		—		—		107,321
Substandard	—		—		—		2,355		10,685		69,743		—		—		82,783
Doubtful	—		—		—		—		—		—		—		—		—
Total Commercial Real Estate	276,677		324,469		439,308		240,256		419,371		926,636		32,418		—		2,659,135
Year-to-date Gross Charge-offs	—		—		—		—		—		1,706		—		—		1,706

Commercial and Industrial
Pass	171,672		231,114		185,884		53,101		47,063		183,165		482,490		—		1,354,489
Special mention	189		620		10,242		—		—		8,848		4,126		—		24,025
Substandard	—		244		14,510		1,595		5,795		1,892		33,633		—		57,669
Doubtful	—		—		—		—		—		—		—		—		—
Total Commercial and Industrial	171,861		231,978		210,636		54,696		52,858		193,905		520,249		—		1,436,183
Year-to-date Gross Charge-offs	—		—		—		—		3,412		15,842		—		—		19,254

Commercial Construction
Pass	75,596		154,456		82,313		14,845		151		4,054		14,208		—		345,623
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		4,576		384		—		—		4,960
Doubtful	—		—		—		—		—		—		—		—		—
Total Commercial Construction	75,596		154,456		82,313		14,845		4,727		4,438		14,208		—		350,583
Year-to-date Gross Charge-offs	—		—		—		—		451		—		—		—		451

Business Banking
Pass	270,129		262,535		204,874		87,346		96,371		321,360		96,618		523		1,339,756
Special mention	—		55		251		224		33		3,508		37		172		4,280
Substandard	—		16		2,486		448		3,170		9,898		99		612		16,729
Doubtful	—		—		—		—		—		—		—		—		—
Total Business Banking	270,129		262,606		207,611		88,018		99,574		334,766		96,754		1,307		1,360,765
Year-to-date Gross Charge-offs	—		67		43		1		88		1,073		34		—		1,306

Consumer Real Estate
Pass	311,887		334,879		147,652		101,999		67,402		183,283		551,368		22,206		1,720,676
Special mention	—		—		—		—		—		189		—		—		189
Substandard	—		583		198		42		488		6,322		712		2,568		10,913
Doubtful	—		—		—		—		—		—		—		—		—
Total Consumer Real Estate	311,887		335,462		147,850		102,041		67,890		189,794		552,080		24,774		1,731,778
Year-to-date Gross Charge-offs	—		1		—		5		1		43		75		296		421

Other Consumer
Pass	11,286		11,965		6,483		3,842		1,062		526		76,426		3,109		114,699
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		24		5		20		146		—		3		198
Doubtful	—		—		—		—		—		—		—		—		—
Total Other Consumer	11,286		11,965		6,507		3,847		1,082		672		76,426		3,112		114,897
Year-to-date Gross Charge-offs	830		146		175		19		37		5		—		288		1,500


Pass	1,117,247		1,318,412		1,060,514		499,034		595,848		1,473,853		1,253,528		25,838		7,344,274
Special Mention	189		1,681		16,493		224		24,920		87,973		4,163		172		135,815
Substandard	—		843		17,218		4,445		24,734		88,385		34,444		3,183		173,252
Doubtful	—		—		—		—		—		—		—		—		—
Total Loan Balance	$	1,117,436	$	1,320,936	$	1,094,225	$	503,703	$	645,502	$	1,650,211	$	1,292,135	$	29,193	$	7,653,341

Year-to-date Gross Charge-offs	$	830	$	214	$	218	$	25	$	3,989	$	18,669	$	109	$	584	$	24,638

Table of Contents

S&T BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

We monitor the delinquent status of the commercial and consumer portfolios on a monthly basis. Loans are considered nonaccrual when interest and principal are 90 days or more past due or management has determined that a material deterioration in the borrower’s financial condition exists. The risk of loss is generally highest for nonaccrual loans.

The following tables present loan balances by year of origination and accrual and nonaccrual status for our portfolio segments as of the dates presented:


	June 30, 2024
(dollars in thousands)	2024		2023		2022		2021		2020		2019 and Prior		Revolving		Revolving-Term		Total

Commercial Real Estate
Accrual	$	48,148	$	278,373	$	372,954	$	451,757	$	222,926	$	1,253,370	$	30,627	$	—	$	2,658,155
Nonaccrual	—		—		994		—		—		13,378		—		—		14,372
Total Commercial Real Estate	48,148		278,373		373,948		451,757		222,926		1,266,748		30,627		—		2,672,527

Commercial and Industrial
Accrual	33,977		177,317		220,542		178,477		48,888		236,335		521,687		—		1,417,223
Nonaccrual	—		130		—		343		—		8		4,251		—		4,732
Total Commercial and Industrial	33,977		177,447		220,542		178,820		48,888		236,343		525,938		—		1,421,955

Commercial Construction
Accrual	31,952		110,187		124,661		67,115		14,490		3,890		10,432		—		362,727
Nonaccrual	—		—		—		—		—		4,960		—		—		4,960
Total Commercial Construction	31,952		110,187		124,661		67,115		14,490		8,850		10,432		—		367,687

Business Banking
Accrual	77,648		250,347		232,460		185,121		81,697		383,427		92,819		1,810		1,305,329
Nonaccrual	—		—		195		—		134		3,292		—		35		3,656
Total Business Banking	77,648		250,347		232,655		185,121		81,831		386,719		92,819		1,845		1,308,985

Consumer Real Estate
Accrual	110,596		334,745		328,370		142,185		97,774		242,117		551,944		25,118		1,832,849
Nonaccrual	—		473		376		—		680		3,012		523		1,843		6,907
Total Consumer Real Estate	110,596		335,218		328,746		142,185		98,454		245,129		552,467		26,961		1,839,756

Other Consumer
Accrual	5,088		8,572		9,429		4,787		2,591		819		66,860		4,284		102,430
Nonaccrual	—		7		—		5		69		149		—		—		230
Total Other Consumer	5,088		8,579		9,429		4,792		2,660		968		66,860		4,284		102,660

Accrual	307,409		1,159,541		1,288,416		1,029,442		468,366		2,119,958		1,274,369		31,212		7,678,713
Nonaccrual	—		610		1,565		348		883		24,799		4,774		1,878		34,857
Total Loan Balance	$	307,409	$	1,160,151	$	1,289,981	$	1,029,790	$	469,249	$	2,144,757	$	1,279,143	$	33,090	$	7,713,570

Table of Contents

S&T BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


	December 31, 2023
(dollars in thousands)	2023		2022		2021		2020		2019		2018 and Prior		Revolving		Revolving-Term		Total

Commercial Real Estate
Accrual	$	276,677	$	324,469	$	439,308	$	240,256	$	419,371	$	920,316	$	32,418	$	—	$	2,652,815
Nonaccrual	—		—		—		—		—		6,320		—		—		6,320
Total Commercial Real Estate	276,677		324,469		439,308		240,256		419,371		926,636		32,418		—		2,659,135

Commercial and Industrial
Accrual	171,861		231,978		210,636		54,696		52,858		193,257		520,019		—		1,435,305
Nonaccrual	—		—		—		—		—		648		230		—		878
Total Commercial and Industrial	171,861		231,978		210,636		54,696		52,858		193,905		520,249		—		1,436,183

Commercial Construction
Accrual	75,596		154,456		82,313		14,845		151		4,054		14,208		—		345,623
Nonaccrual	—		—		—		—		4,576		384		—		—		4,960
Total Commercial Construction	75,596		154,456		82,313		14,845		4,727		4,438		14,208		—		350,583

Business Banking
Accrual	270,129		262,606		207,611		87,979		99,354		330,902		96,754		1,283		1,356,618
Nonaccrual	—		—		—		39		220		3,864		—		24		4,147
Total Business Banking	270,129		262,606		207,611		88,018		99,574		334,766		96,754		1,307		1,360,765

Consumer Real Estate
Accrual	311,887		335,086		147,689		101,518		67,577		186,909		551,858		22,942		1,725,466
Nonaccrual	—		376		161		523		313		2,885		222		1,832		6,312
Total Consumer Real Estate	311,887		335,462		147,850		102,041		67,890		189,794		552,080		24,774		1,731,778

Other Consumer
Accrual	11,286		11,965		6,499		3,656		1,082		541		76,426		3,112		114,567
Nonaccrual	—		—		8		191		—		131		—		—		330
Total Other Consumer	11,286		11,965		6,507		3,847		1,082		672		76,426		3,112		114,897

Accrual	1,117,436		1,320,560		1,094,056		502,950		640,393		1,635,979		1,291,683		27,337		7,630,394
Nonaccrual	—		376		169		753		5,109		14,232		452		1,856		22,947
Total Loan Balance	$	1,117,436	$	1,320,936	$	1,094,225	$	503,703	$	645,502	$	1,650,211	$	1,292,135	$	29,193	$	7,653,341

The following tables present the age analysis of past due loans segregated by class of loans as of the dates presented:


	June 30, 2024
(dollars in thousands)	Current		30-59 Days Past Due		60-89 Days Past Due		Nonaccrual		Total Past Due Loans		Total Loans
Commercial real estate	$	2,648,879	$	9,276	$	—	$	14,372	$	23,648	$	2,672,527
Commercial and industrial	1,417,223		—		—		4,732		4,732		1,421,955
Commercial construction	362,727		—		—		4,960		4,960		367,687
Business banking	1,301,340		2,265		1,724		3,656		7,645		1,308,985
Consumer real estate	1,827,336		2,516		2,997		6,907		12,420		1,839,756
Other consumer	102,112		185		133		230		548		102,660
Total	$	7,659,617	$	14,242	$	4,854	$	34,857	$	53,953	$	7,713,570


	December 31, 2023
(dollars in thousands)	Current		30-59 Days Past Due		60-89 Days Past Due		Nonaccrual		Total Past Due Loans		Total Loans
Commercial real estate	$	2,649,412	$	—	$	3,403	$	6,320	$	9,723	$	2,659,135
Commercial and industrial	1,435,301		4		—		878		882		1,436,183
Commercial construction	345,623		—		—		4,960		4,960		350,583
Business banking	1,351,048		3,525		2,045		4,147		9,717		1,360,765
Consumer real estate	1,719,751		3,352		2,363		6,312		12,027		1,731,778
Other consumer	114,138		366		63		330		759		114,897
Total	$	7,615,273	$	7,247	$	7,874	$	22,947	$	38,068	$	7,653,341

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S&T BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following tables present loans on nonaccrual status by class of loan for the year-to-date periods presented:


	June 30, 2024
(dollars in thousands)	Beginning of Period Nonaccrual		End of Period Nonaccrual		Nonaccrual With No Related Allowance		Interest Income Recognized on Nonaccrual (1)
Commercial real estate	$	6,320	$	14,372	$	994	$	68
Commercial and industrial	878		4,732		—		4
Commercial construction	4,960		4,960		4,576		—
Business banking	4,147		3,656		—		74
Consumer real estate	6,312		6,907		—		206
Other consumer	330		230		—		—
Total	$	22,947	$	34,857	$	5,570	$	352

(1) Represents only cash payments received and applied to interest on nonaccrual loans.


	December 31, 2023
(dollars in thousands)	Beginning of Period Nonaccrual		End of Period Nonaccrual		Nonaccrual With No Related Allowance		Interest Income Recognized on Nonaccrual (1)
Commercial real estate	$	7,100	$	6,320	$	5,940	$	46
Commercial and industrial	283		878		—		38
Commercial construction	384		4,960		4,576		—
Business banking	4,490		4,147		—		209
Consumer real estate	6,526		6,312		—		308
Other consumer	269		330		—		2
Total	$	19,052	$	22,947	$	10,516	$	603

(1) Represents only cash payments received and applied to interest on nonaccrual loans.

The following tables present collateral-dependent loans as of the dates presented:


	June 30, 2024
	Type of Collateral
(dollars in thousands)	Real Estate		Business Assets
Commercial real estate	$	14,016	$	—
Commercial and industrial	—		4,495
Commercial construction	4,576		—



Total	$	18,592	$	4,495


	December 31, 2023
	Type of Collateral
(dollars in thousands)	Real Estate		Business Assets
Commercial real estate	$	5,940	$	—

Commercial construction	4,576		—



Total	$	10,516	$	—

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S&T BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following tables present activity in the ACL for the periods presented:



	Six Months Ended June 30, 2024
(dollars in thousands)	Commercial Real Estate		Commercial and Industrial		Commercial Construction		Business Banking		Consumer Real Estate		Other Consumer		Total Loans
Allowance for credit losses on loans:
Balance at beginning of period	$	37,886	$	34,538	$	5,382	$	12,858	$	14,663	$	2,639	$	107,966

Provision for credit losses on loans (1)	3,938		532		( 35 )		( 1,862 )		1,089		723		4,385
Charge-offs	( 5,205 )		( 1,128 )		—		( 194 )		( 471 )		( 786 )		( 7,784 )
Recoveries	458		793		—		81		95		156		1,583
Net (Charge-offs)/ Recoveries	( 4,747 )		( 335 )		—		( 113 )		( 376 )		( 630 )		( 6,201 )
Balance at End of Period	$	37,077	$	34,735	$	5,347	$	10,883	$	15,376	$	2,732	$	106,150
(1) Excludes the provision for credits losses for unfunded commitments.


	Six Months Ended June 30, 2023
(dollars in thousands)	Commercial Real Estate		Commercial and Industrial		Commercial Construction		Business Banking		Consumer Real Estate		Other Consumer		Total Loans
Allowance for credit losses on loans:
Balance at beginning of period	$	41,428	$	25,710	$	6,264	$	12,547	$	12,105	$	3,286	$	101,340
Impact of ASU 2022-02	—		75		215		251		278		( 251 )		568
Provision for credit losses on loans (1)	( 1,555 )		8,356		258		1,340		1,038		264		9,701
Charge-offs	—		( 15,220 )		—		( 662 )		( 117 )		( 682 )		( 16,681 )
Recoveries	964		9,407		2		140		114		202		10,829
Net (Charge-offs)/Recoveries	964		( 5,813 )		2		( 522 )		( 3 )		( 480 )		( 5,852 )
Balance at End of Period	$	40,837	$	28,328	$	6,739	$	13,616	$	13,418	$	2,819	$	105,757
(1) Excludes the provision for credits losses for unfunded commitments.


	Three Months Ended June 30, 2024
(dollars in thousands)	Commercial Real Estate		Commercial and Industrial		Commercial Construction		Business Banking		Consumer Real Estate		Other Consumer		Total Loans
Allowance for credit losses on loans:
Balance at beginning of period	$	35,612	$	34,207	$	5,149	$	11,798	$	15,410	$	2,626	$	104,802

Provision for credit losses on loans (1)	1,101		( 149 )		198		( 868 )		231		447		960
Charge-offs	—		—		—		( 96 )		( 332 )		( 417 )		( 845 )
Recoveries	364		677		—		49		67		76		1,233
Net (Charge-offs)/ Recoveries	364		677		—		( 47 )		( 265 )		( 341 )		388
Balance at End of Period	$	37,077	$	34,735	$	5,347	$	10,883	$	15,376	$	2,732	$	106,150
(1) Excludes the provision for credits losses for unfunded commitments.


	Three Months Ended June 30, 2023
(dollars in thousands)	Commercial Real Estate		Commercial and Industrial		Commercial Construction		Business Banking		Consumer Real Estate		Other Consumer		Total Loans
Allowance for credit losses on loans:
Balance at beginning of period	$	40,426	$	31,297	$	6,893	$	13,680	$	12,855	$	2,962	$	108,113

Provision for credit losses on loans (1)	( 544 )		8,832		( 154 )		( 157 )		550		84		8,611
Charge-offs	—		( 11,808 )		—		( 10 )		( 40 )		( 364 )		( 12,222 )
Recoveries	955		7		—		103		53		137		1,255
Net (Charge-offs)/Recoveries	955		( 11,801 )		—		93		13		( 227 )		( 10,967 )
Balance at End of Period	$	40,837	$	28,328	$	6,739	$	13,616	$	13,418	$	2,819	$	105,757
(1) Excludes the provision for credit losses for unfunded commitments.

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S&T BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

Derivatives Designated as Hedging Instruments

The following table indicates the amounts representing the value of derivative assets and derivative liabilities as of the dates presented:


	Derivative Assets (Included in Other Assets)								Derivative Liabilities (Included in Other Liabilities)
	June 30, 2024				December 31, 2023				June 30, 2024				December 31, 2023
(dollars in thousands)	Notional Amount		Fair Value		Notional Amount		Fair Value		Notional Amount		Fair Value		Notional Amount		Fair Value
Derivatives Designated as Hedging Instruments
Interest rate swap contracts - cash flow hedge	$	—	$	—	$	—	$	—	$	500,000	$	17,156	$	500,000	$	14,739
Total Derivatives Designated as Hedging Instruments	$	—	$	—	$	—	$	—	$	500,000	$	17,156	$	500,000	$	14,739

Derivatives Not Designated as Hedging Instruments
Interest rate swap contracts - commercial loans	854,507		70,313		892,712		63,018		854,507		70,765		892,712		63,554


Total Derivatives Not Designated as Hedging Instruments	$	854,507	$	70,313	$	892,712	$	63,018	$	854,507	$	70,765	$	892,712	$	63,554

Total Derivatives	$	854,507	$	70,313	$	892,712	$	63,018	$	1,354,507	$	87,921	$	1,392,712	$	78,293

The following table indicates the gross amounts of interest rate swap derivative assets and derivative liabilities, the amounts offset and the carrying values in the Consolidated Balance Sheets at the dates presented:


	Derivatives (included in Other Assets)				Derivatives (included in Other Liabilities)
(dollars in thousands)	June 30, 2024		December 31, 2023		June 30, 2024		December 31, 2023
Gross amounts recognized	$	70,313	$	63,018	$	87,921	$	78,293
Gross amounts offset	—		—		—		—
Net amounts presented in the Consolidated Balance Sheets	70,313		63,018		87,921		78,293
Netting adjustments (1)	( 11,580 )		( 10,424 )		( 11,580 )		( 10,424 )
Cash collateral (2)	( 56,680 )		( 50,920 )		( 6,264 )		( 5,356 )
Net Amount	$	2,053	$	1,674	$	70,077	$	62,513
(1) Netting adjustments represent the amounts recorded to convert derivative assets and liabilities from a gross basis to a net basis in accordance with the applicable accounting guidance.
(2) Cash collateral represents the amount that cannot be used to offset our derivative assets and liabilities from a gross basis to a net basis in accordance with the applicable accounting guidance. The application of the cash collateral cannot reduce the net derivative position below zero. Therefore, excess cash collateral, if any, is not reflected above.

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S&T BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



The following tables present the effect, net of tax, of the cash flow hedges on OCI and on the Condensed Consolidated Statements of Comprehensive Income (Loss) for the periods presented:

	Amount of Loss Recognized in Other Comprehensive Income (Loss)						Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Interest Income
(dollars in thousands)	Three months ended June 30, 2024			Three months ended June 30, 2023			Three months ended June 30, 2024			Three months ended June 30, 2023
Derivatives in Cash Flow Hedging Relationships:
Interest rate swap contracts - cash flow hedge		$	979		$	( 6,534 )		$	( 2,776 )		$	( 2,355 )

Total		$	979		$	( 6,534 )		$	( 2,776 )		$	( 2,355 )

	Amount of Gain (Loss) Recognized in Other Comprehensive Income (Loss)						Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Interest Income
(dollars in thousands)	Six months ended June 30, 2024			Six months ended June 30, 2023			Six months ended June 30, 2024			Six months ended June 30, 2023
Derivatives in Cash Flow Hedging Relationships:
Interest rate swap contracts - cash flow hedge		$	( 1,859 )		$	( 1,752 )		$	( 5,440 )		$	( 4,203 )

Total		$	( 1,859 )		$	( 1,752 )		$	( 5,440 )		$	( 4,203 )

Amounts reported in OCI related to derivatives that are designated as hedging instruments are reclassified to interest income as interest payments are received on variable rate assets. During the next twelve months, we estimate that an additional $ 11.4 million will be reclassified as a decrease to interest income. Our current interest rate swap agreements have 3 - 5 year terms with maturity dates extending into 2027.

The following table indicates the gain (loss) recognized in income on derivatives not designated as hedging instruments for the periods presented:


	Three months ended June 30,						Six months ended June 30,
(dollars in thousands)	2024			2023			2024			2023
Derivatives not Designated as Hedging Instruments
Interest rate swap contracts—commercial loans		$	48		$	—		$	82		$	—
Interest rate lock commitments—mortgage loans		—			( 5 )			—			( 5 )
Forward sale contracts—mortgage loans		—			( 2 )			—			( 2 )
Total Derivatives Gain (Loss)		$	48		$	( 7 )		$	82		$	( 7 )

NOTE 7. TAX CREDIT EQUITY INVESTMENTS

As part of our responsibilities under the Community Reinvestment Act and due to their favorable federal income tax benefits, we invest in LIHTC and HTC partnerships. As a limited partner in these operating partnerships, we receive tax credits and tax deductions for losses incurred by the underlying properties. Effective January 1, 2024, we adopted ASU 2023-02 and elected to apply the PAM to both LIHTC and HTC equity investments. The adoption of this ASU resulted in a $ 1.0 million cumulative effect adjustment, which decreased retained earnings and other assets. Tax credit equity investment balances of $ 43.7 million were included in other assets in the Consolidated Balance Sheets at June 30, 2024. Unfunded commitments of $ 7.1 million were included in other liabilities in the Consolidated Balance Sheets at June 30, 2024.

For the three and six months ended June 30, 2024, amortization expense of $ 0.8 million and $ 1.5 million, as well as, tax credits and other tax benefits of $ 0.9 million and $ 1.8 million were recognized in income tax expense in the Condensed Consolidated Statements of Comprehensive Income. No impairment losses were recognized for the three and six months ended June 30, 2024.

Prior to the adoption of ASU 2023-02, the cost method was used to account for our investments in tax credit equity investments. For the three and six months ended June 30, 2023 amortization expense of $ 0.5 million and $ 1.0 million was included in other expense.

Further, for the three and six months ended June 30, 2023, tax credits of $ 0.9 million and $ 1.1 million were recognized as a reduction to income tax expense on our Consolidated Statements of Comprehensive Income. Other tax benefits of $ 3.0 million were included in deferred tax assets on our Consolidated Balance Sheets at June 30, 2023.

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S&T BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8. COMMITMENTS AND CONTINGENCIES

Commitments

In the normal course of business, we offer off-balance sheet credit arrangements to enable our customers to meet their financing objectives. These instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated financial statements. Our exposure to credit loss, in the event the customer does not satisfy the terms of the agreement, equals the contractual amount of the obligation less the value of any collateral. We apply the same credit policies in making commitments and standby letters of credit that are used for the underwriting of loans to customers. Commitments generally have fixed expiration dates, annual renewals or other termination clauses and may require payment of a fee. Because many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements.

The following table sets forth our commitments and letters of credit as of the dates presented:


(dollars in thousands)	June 30, 2024			December 31, 2023
Commitments to extend credit		$	2,452,401		$	2,566,154
Standby letters of credit		65,095			61,889
Total		$	2,517,496		$	2,628,043

Allowance for Credit Losses on Unfunded Loan Commitments

We maintain an ACL on unfunded commercial and consumer lending commitments and letters of credit to provide for the risk of loss inherent in these arrangements. The allowance is computed using a methodology similar to that used to determine the ACL for loans, modified to take into account the probability of a draw-down on the commitment. The provision for credit losses on unfunded loan commitments is included in the provision for credit losses on our Condensed Consolidated Statements of Comprehensive Income. The allowance for unfunded commitments is included in other liabilities in the Consolidated Balance Sheets.

The following table presents activity in the ACL on unfunded loan commitments for the periods presented:


	Three months ended June 30,						Six months ended June 30,
(dollars in thousands)	2024			2023			2024			2023
Balance at beginning of period		$	6,049		$	8,028		$	6,848		$	8,196


Provision for credit losses		( 538 )			1,918			( 1,337 )			1,750
Total		$	5,511		$	9,946		$	5,511		$	9,946

Litigation

In the normal course of business, we are subject to various legal and administrative proceedings and claims. While any type of litigation contains a level of uncertainty, we believe that the outcome of such proceedings or claims pending will not have a material adverse effect on our consolidated financial position or results of operations.

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S&T BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9. OTHER COMPREHENISVE INCOME (LOSS)

The following tables present the change in components of other comprehensive (loss) income for the periods presented, net of tax effects.


	Three Months Ended June 30, 2024									Three Months Ended June 30, 2023
(dollars in thousands)	Pre-Tax Amount			Tax Benefit (Expense)			Net of Tax Amount			Pre-Tax Amount			Tax Benefit (Expense)			Net of Tax Amount
Change in net unrealized gains (losses) on available-for-sale debt securities		$	7		$	( 2 )		$	5		$	( 14,190 )		$	3,013		$	( 11,177 )
Net available-for-sale securities losses reclassified into earnings		3,150			( 678 )			2,472			—			—			—
Change in interest rate swap		1,248			( 269 )			979			( 8,308 )			1,774			( 6,534 )
Adjustment to funded status of employee benefit plans		391			( 84 )			307			401			( 75 )			326
Other Comprehensive Income (Loss)		$	4,796		$	( 1,033 )		$	3,763		$	( 22,097 )		$	4,712		$	( 17,385 )


	Six Months Ended June 30, 2024									Six Months Ended June 30, 2023
(dollars in thousands)	Pre-Tax Amount			Tax Benefit			Net of Tax Amount			Pre-Tax Amount			Tax Benefit			Net of Tax Amount
Change in net unrealized gains (losses) on available-for-sale debt securities		$	( 5,773 )		$	1,704		$	( 4,069 )		$	( 130 )		$	12		$	( 118 )
Net available-for-sale securities losses reclassified into earnings		3,147			( 929 )			2,218			—			—			—
Change in interest rate swap		( 2,417 )			558			( 1,859 )			( 2,228 )			476			( 1,752 )
Adjustment to funded status of employee benefit plans		802			( 125 )			677			( 74 )			26			( 48 )
Other Comprehensive Income (Loss)		$	( 4,241 )		$	1,208		$	( 3,033 )		$	( 2,432 )		$	514		$	( 1,918 )

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S&T BANCORP, INC. AND SUBSIDIARIES

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management’s Discussion and Analysis of Financial Condition and Results of Operations, or MD&A, represents an overview of our consolidated results of operations and financial condition and highlights material changes in our financial condition and results of operations for the three and six months ended June 30, 2024 and 2023. Our MD&A should be read in conjunction with our Consolidated Financial Statements and Notes. The results of operations reported in the accompanying Consolidated Financial Statements are not necessarily indicative of results to be expected in future periods.

Important Note Regarding Forward-Looking Statements

This quarterly Report on Form 10-Q contains or incorporates statements that we believe are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally relate to our financial condition, results of operations, plans, objectives, outlook for earnings, revenues, expenses, capital and liquidity levels and ratios, asset levels, asset quality, financial position and other matters regarding or affecting S&T and its future business and operations. Forward-looking statements are typically identified by words or phrases such as “will likely result,” “expect,” “anticipate,” “estimate,” “forecast,” “project,” “intend,” “believe,” “assume,” “strategy,” “trend,” “plan,” “outlook,” “outcome,” “continue,” “remain,” “potential,” “opportunity,” “comfortable,” “current,” “position,” “maintain,” “sustain,” “seek,” “achieve” and variations of such words and similar expressions, or future or conditional verbs such as will, would, should, could or may. Although we believe the assumptions upon which these forward-looking statements are based are reasonable, any of these assumptions could prove to be inaccurate and the forward-looking statements based on these assumptions could be incorrect. The matters discussed in these forward-looking statements are subject to various risks, uncertainties and other factors that could cause actual results and trends to differ materially from those made, projected or implied in or by the forward-looking statements depending on a variety of uncertainties or other factors including, but not limited to: credit losses and the credit risk of our commercial and consumer loan products; changes in the level of charge-offs and changes in estimates of the adequacy of the allowance for credit losses, or ACL; cyber-security concerns; rapid technological developments and changes; operational risks or risk management failures by us or critical third parties, including fraud risk; our ability to manage our reputational risks; sensitivity to the interest rate environment, a rapid increase in interest rates or a change in the shape of the yield curve; a change in spreads on interest-earning assets and interest-bearing liabilities; any remaining uncertainties with the transition from LIBOR as a reference rate; regulatory supervision and oversight, including changes in regulatory capital requirements and our ability to address those requirements; unanticipated changes in our liquidity position; unanticipated changes in regulatory and governmental policies impacting interest rates and financial markets; changes in accounting policies, practices or guidance; legislation affecting the financial services industry as a whole, and S&T, in particular; developments affecting the industry and the soundness of financial institutions and further disruption to the economy and U.S. banking system; the outcome of pending and future litigation and governmental proceedings; increasing price and product/service competition; the ability to continue to introduce competitive new products and services on a timely, cost-effective basis; managing our internal growth and acquisitions; the possibility that the anticipated benefits from acquisitions cannot be fully realized in a timely manner or at all, or that integrating the acquired operations will be more difficult, disruptive or costly than anticipated; containing costs and expenses; reliance on significant customer relationships; an interruption or cessation of an important service by a third-party provider; our ability to attract and retain talented executives and employees; general economic or business conditions, including the strength of regional economic conditions in our market area; ESG practices and disclosures, including climate change, hiring practices, the diversity of the work force, and racial and social justice issues; deterioration of the housing market and reduced demand for mortgages; deterioration in the overall macroeconomic conditions or the state of the banking industry that could warrant further analysis of the carrying value of goodwill and could result in an adjustment to its carrying value resulting in a non-cash charge to net income; the stability of our core deposit base and access to contingency funding; re-emergence of turbulence in significant portions of the global financial and real estate markets that could impact our performance, both directly, by affecting our revenues and the value of our assets and liabilities, and indirectly, by affecting the economy generally and access to capital in the amounts, at the times and on the terms required to support our future businesses and geopolitical tensions and conflicts between nations.

Many of these factors, as well as other factors, are described elsewhere in this report, and in our 2023 Form 10-K, including Part I, Item 1A, Risk Factors and any of our subsequent filings with the SEC. Forward-looking statements are based on beliefs and assumptions using information available at the time the statements are made. We caution you not to unduly rely on forward-looking statements because the assumptions, beliefs, expectations and projections about future events may, and often do, differ materially from actual results. Any forward-looking statement speaks only as to the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect developments occurring after the statement is made.

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S&T BANCORP, INC. AND SUBSIDIARIES

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Critical Accounting Policies and Estimates

We view critical accounting policies to be those which are highly dependent on subjective or complex estimates, assumptions and judgments and where changes in those estimates and assumptions could have a significant impact on the Consolidated Financial Statements. Further, we view critical accounting estimates as those estimates made in accordance with GAAP that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our financial condition or results of operations. Our critical accounting policies and estimates as of June 30, 2024 remained unchanged from the disclosures presented in our 2023 Form 10-K under Part II, Item 7 - “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Explanation of Use of Non-GAAP Financial Measures

In addition to traditional financial measures presented in accordance with GAAP, our management uses, and this report contains or references, certain non-GAAP financial measures discussed below. We believe these non-GAAP financial measures provide information useful to investors in understanding our underlying business, operational performance and performance trends as they facilitate comparisons with the performance of other companies in the financial services industry. Although we believe that these non-GAAP financial measures enhance investors’ understanding of our business and performance, these non-GAAP financial measures should not be considered alternatives to GAAP or considered to be more important than financial results determined in accordance with GAAP, nor are they necessarily comparable with non-GAAP measures which may be presented by other companies.

The interest income on interest-earning assets, net interest income and net interest margin are presented on an FTE basis (non-GAAP). The FTE basis (non-GAAP) adjusts for the tax benefit of income on certain tax-exempt loans and securities and the dividend-received deduction for equity securities using the federal statutory tax rate of 21 percent for each period. We believe this to be the preferred industry measurement of net interest income that provides a relevant comparison between taxable and non-taxable sources of interest income.

The following table reconciles interest and dividend income and net interest income per the Condensed Consolidated Statements of Comprehensive Income to interest income, net interest income and net interest margin on an FTE basis (non-GAAP) for the periods presented:




	Three Months Ended June 30,								Six Months Ended June 30,
(dollars in thousands)	2024				2023				2024				2023
Interest and dividend income		$	128,765			$	117,333			$	256,519			$	228,236
Plus: taxable equivalent adjustment		682				639				1,375				1,194
Interest Income on an FTE Basis (Non-GAAP)		$	129,447			$	117,972			$	257,894			$	229,430

Interest and dividend income		$	128,765			$	117,333			$	256,519			$	228,236
Less: Interest expense		(45,171)				(29,210)				(89,448)				(51,322)
Net Interest Income		83,594				88,123				167,071				176,914
Plus: taxable equivalent adjustment		682				639				1,375				1,914
Net Interest Income on an FTE Basis (Non-GAAP)		$	84,276			$	88,762			$	168,446			$	178,108

Net interest margin		3.82		%		4.19		%		3.81		%		4.24		%
Plus: taxable equivalent adjustment		0.03		%		0.03		%		0.03		%		0.03		%
Net Interest Margin on an FTE Basis (Non-GAAP)		3.85		%		4.22		%		3.84		%		4.27		%

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Return on average tangible shareholders' equity (non-GAAP) is a key profitability metric used by management to measure financial performance. The following table provides a reconciliation of return on average tangible shareholders' equity (non-GAAP) by reconciling net income (GAAP) per the Condensed Consolidated Statements of Comprehensive Income to net income before amortization of intangibles and average shareholder's equity to average tangible shareholders' equity for the periods presented:




	Three Months Ended June 30,								Six Months Ended June 30,
(dollars in thousands)	2024				2023				2024				2023
Net income (annualized)		$	138,239			$	138,248			$	131,941			$	149,763
Plus: amortization of intangibles (annualized), net of tax		921				1,046				932				1,066
Net income before amortization of intangibles (annualized)		$	139,160			$	139,294			$	132,873			$	150,829

Average shareholders' equity		$	1,303,270			$	1,230,615			$	1,296,892			$	1,218,553
Less: average goodwill and other intangible assets, net of deferred tax liability		(376,285)				(377,280)				(376,402)				(377,427)
Average tangible shareholders' equity		$	926,985			$	853,335			$	920,490			$	841,126
Return on Average Tangible Shareholders' Equity (non-GAAP)		15.01		%		16.32		%		14.44		%		17.93		%

Executive Overview

We are a bank holding company that is headquartered in Indiana, Pennsylvania with assets of $9.6 billion at June 30, 2024. We operate in Pennsylvania and Ohio providing a full range of financial services with retail and commercial banking products, cash management services, trust and brokerage services. Our common stock trades on the NASDAQ Global Select Market under the symbol “STBA”.

We earn revenue primarily from interest on loans and securities and fees charged for financial services provided to our customers. We incur expenses for the cost of deposits and other funding sources, provision for credit losses and other operating costs such as salaries and employee benefits, data processing, occupancy and tax expense.

Our purpose is building a better future together through people-forward banking. We believe that all banking should be personal. We cultivate relationships rooted in trust, strengthened by going above and beyond and renewed with every interaction. Our strategic priorities for 2024 and beyond will be focused on our deposit franchise, core profitability, asset quality and talent and engagement.

Earnings Summary

The following table presents a summary of key profitability metrics for the periods presented:




	Three Months Ended June 30,								Six Months Ended June 30,
(dollars in thousands)	2024				2023				2024				2023
Net income		$	34,371			$	34,467			$	65,610			$	74,266
Earnings per share - diluted		$	0.89			$	0.89			$	1.70			$	1.91
Return on average assets		1.45		%		1.51		%		1.38		%		1.64		%
Return on average shareholders' equity		10.61		%		11.23		%		10.17		%		12.29		%
Return on average tangible shareholders' equity (non-GAAP) (1)		15.01		%		16.32		%		14.44		%		17.93		%
(1) Reconciled to GAAP in the "Explanation of Use of Non-GAAP Financial Measures" section of this MD&A.

We recognized net income of $34.4 million, or $0.89 per diluted share, for the three months ended June 30, 2024 compared to net income of $34.5 million, or $0.89 per diluted share, for the same period in 2023 and net income of $65.6 million, or $1.70 per diluted share, for the six months ended June 30, 2024.

Net interest income decreased $4.5 million, or 5.14 percent, and $9.8 million, or 5.56 percent, for the three and six months ended June 30, 2024 compared to the same periods in 2023. Net interest margin, or NIM, on an FTE basis (non-GAAP) decreased 37 and 43 basis points for the three and six months ended June 30, 2024 compared to the same periods in 2023. The decreases in both net interest income and NIM on an FTE basis (non-GAAP) were primarily due to the impact of higher interest rates on total interest-bearing liabilities compared to the same period in 2023. NIM is reconciled to net interest margin adjusted to an FTE basis (non-GAAP) in the "Explanation of Use of Non-GAAP Financial Measures" section of this MD&A.

The provision for credit losses decreased $10.1 million and $8.5 million to $0.4 million and $3.0 million for the three and six months ended June 30, 2024 compared to $10.5 million and $11.5 million for the same periods in 2023. The decrease in the provision for credit losses for the three and six months ended June 30, 2024 compared to the same periods in 2023 is mainly attributed to lower net charge-offs and reductions in our criticized and classified loans, resulting in a decrease in the quantitative reserve.

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S&T BANCORP, INC. AND SUBSIDIARIES

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Noninterest income had a slight decrease of $0.9 million, or 6.24 percent, and $1.2 million or 4.55 percent, for the three and six months ended June 30, 2024 compared to the same periods in 2023. During the second quarter of 2024, our participation in the Visa exchange offer for Visa Class B-1 common stock resulted in a fair value adjustment of $3.2 million in other income. During this same period, a loss on the sale of securities of $3.2 million was recognized related to the repositioning of $49.0 million of securities into longer duration, higher-yielding securities.

Noninterest expense increased $4.0 million, or 8.01 percent, and $6.8 million, or 6.71 percent, for the three and six months ended June 30, 2024 compared to the same periods in 2023. The most significant increase in noninterest expense related to salaries and employee benefits which increased $5.0 million and $6.9 million for the three and six months ended June 30, 2024 due to annual merit increases, inflationary wage pressure, the acquisition of new talent, higher incentives and medical costs.

Our effective tax rate was 19.8 percent and 20.0 percent for the three and six months ended June 30, 2024 compared to 18.2 percent and 18.8 percent for the three and six months ended June 30, 2023. The increase in the effective tax rate for the three and six months ended June 30, 2024 was primarily due to the adoption of the PAM related to tax credit equity investments on January 1, 2024.

RESULTS OF OPERATIONS


			Three and Six Months Ended June 30, 2024 Compared to Three and Six Months Ended June 30, 2023

Net Interest Income

Our principal source of revenue is net interest income. Net interest income represents the difference between the interest and fees earned on interest-earning assets and the interest paid on interest-bearing liabilities. Net interest income is affected by changes in the average balance of interest-earning assets and interest-bearing liabilities and changes in interest rates and spreads. The level and mix of interest-earning assets and interest-bearing liabilities is managed by our Asset and Liability Committee, or ALCO, in order to mitigate interest rate and liquidity risks of the balance sheet. A variety of ALCO strategies were implemented, within prescribed ALCO risk parameters, to produce what we believe is an acceptable level of net interest income.

Average Balance Sheet and Net Interest Income Analysis (FTE) (non-GAAP)

The following tables provide information regarding the average balances, interest and rates earned on interest-earning assets and the average balances, interest and rates paid on interest-bearing liabilities for the periods presented:

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


	Three Months Ended June 30, 2024							Three Months Ended June 30, 2023
(dollars in thousands)	Average Balance		Interest			Rate		Average Balance		Interest			Rate
ASSETS
Interest-bearing deposits with banks	$	143,521		$	1,952	5.47	%	$	132,900		$	1,863	5.61	%
Securities, at fair value (1)(2)	961,552			7,048		2.93	%	983,349			6,240		2.54	%
Loans held for sale	27			—		7.37	%	92			2		6.87	%
Commercial real estate	3,346,725			49,676		5.97	%	3,176,154			44,508		5.62	%
Commercial and industrial	1,606,173			29,462		7.38	%	1,684,944			29,960		7.13	%
Commercial construction	374,856			7,292		7.82	%	384,329			7,309		7.63	%
Total Commercial Loans	5,327,754			86,430		6.52	%	5,245,427			81,777		6.25	%
Residential mortgage	1,528,200			19,088		5.00	%	1,229,129			13,877		4.52	%
Home equity	644,545			11,236		7.01	%	647,070			10,638		6.59	%
Installment and other consumer	105,313			2,259		8.63	%	118,641			2,448		8.28	%
Consumer construction	72,899			1,082		5.97	%	42,879			455		4.26	%
Total Consumer Loans	2,350,957			33,665		5.75	%	2,037,719			27,418		5.39	%
Total Portfolio Loans	7,678,711			120,095		6.29	%	7,283,146			109,195		6.01	%
Total Loans (1)(3)	7,678,738			120,095		6.29	%	7,283,238			109,197		6.01	%
Total other earning assets	20,087			352		7.04	%	37,003			672		7.26	%
Total Interest-earning Assets	8,803,898			129,447		5.91	%	8,436,490			117,972		5.61	%
Noninterest-earning assets	756,552							740,299
Total Assets	$	9,560,450						$	9,176,789
LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest-bearing demand	$	822,671		$	2,306	1.13	%	$	847,776		$	1,217	0.58	%
Money market	1,938,963			15,660		3.25	%	1,599,051			8,474		2.13	%
Savings	915,768			1,583		0.70	%	1,037,924			986		0.38	%
Certificates of deposit	1,774,037			20,080		4.55	%	1,235,496			9,425		3.06	%
Total Interest-bearing Deposits	5,451,439			39,629		2.92	%	4,720,247			20,102		1.71	%

Short-term borrowings	261,923			3,319		5.09	%	529,013			7,107		5.39	%
Long-term borrowings	39,099			441		4.53	%	32,980			341		4.14	%
Junior subordinated debt securities	49,379			1,004		8.18	%	54,474			1,035		7.62	%
Total Borrowings	350,401			4,764		5.46	%	616,467			8,483		5.52	%
Other interest-bearing liabilities	57,734			778		5.42	%	49,572			625		5.06	%
Total Interest-bearing Liabilities	5,859,574			45,171		3.10	%	5,386,286			29,210		2.18	%
Noninterest-bearing liabilities	2,397,606							2,559,888
Shareholders' equity	1,303,270							1,230,615
Total Liabilities and Shareholders' Equity	$	9,560,450						$	9,176,789
Net Interest Income (FTE) (non-GAAP) (1)(2)				$	84,276						$	88,762
Net Interest Margin (FTE) (non-GAAP) (1)(2)						3.85	%						4.22	%

(1) Tax-exempt interest income is on an FTE basis (non-GAAP) using the statutory federal corporate income tax rate of 21 percent.

(2) Taxable investment income is adjusted for the dividend-received deduction for equity securities.

(3) Nonaccruing loans are included in the daily average loan amounts outstanding.

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS




	Six months ended June 30, 2024							Six months ended June 30, 2023
(dollars in thousands)	Average Balance		Interest			Rate		Average Balance		Interest			Rate
ASSETS
Interest-bearing deposits with banks	$	144,079		$	4,018	5.61	%	$	136,679		$	3,346	4.90	%
Securities, at fair value (1)(2)	964,128			13,846		2.87	%	991,931			12,509		2.52	%
Loans held for sale	101			4		7.16	%	108			4		6.60	%
Commercial real estate	3,355,933			99,233		5.95	%	3,154,390			86,614		5.54	%
Commercial and industrial	1,616,403			59,230		7.37	%	1,697,956			58,474		6.94	%
Commercial construction	369,972			14,285		7.76	%	386,549			14,241		7.43	%
Total Commercial Loans	5,342,308			172,748		6.50	%	5,238,895			159,329		6.13	%
Residential mortgage	1,503,405			37,274		4.97	%	1,187,208			26,490		4.48	%
Home equity	646,405			22,506		7.00	%	648,718			20,704		6.44	%
Installment and other consumer	108,106			4,642		8.64	%	120,746			4,812		8.04	%
Consumer construction	71,288			2,051		5.79	%	44,366			984		4.47	%
Total Consumer Loans	2,329,204			66,473		5.73	%	2,001,038			52,990		5.33	%
Total Portfolio Loans	7,671,512			239,221		6.27	%	7,239,933			212,319		5.91	%
Total Loans (1)(3)	7,671,613			239,225		6.27	%	7,240,041			212,323		5.91	%
Total other earning assets	22,711			805		7.08	%	35,868			1,252		6.99	%
Total Interest-earning Assets	8,802,531			$	257,894	5.89	%	8,404,519			$	229,430	5.50	%
Noninterest-earning assets	747,147							747,464
Total Assets	$	9,549,678						$	9,151,983
LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest-bearing demand	$	825,883		$	4,625	1.13	%	$	836,263		$	1,890	0.46	%
Money market	1,929,486			30,721		3.20	%	1,634,820			16,222		2.00	%
Savings	927,618			3,066		0.66	%	1,063,887			1,792		0.34	%
Certificates of deposit	1,706,548			37,878		4.46	%	1,144,484			15,101		2.66	%
Total Interest-bearing Deposits	5,389,535			76,290		2.85	%	4,679,454			35,005		1.51	%

Short-term borrowings	335,137			8,779		5.26	%	490,554			12,594		5.18	%
Long-term borrowings	39,160			883		4.53	%	23,885			439		3.71	%
Junior subordinated debt securities	49,372			2,014		8.20	%	54,466			2,042		7.56	%
Total Borrowings	423,669			11,676		5.54	%	568,905			15,075		5.34	%
Other interest-bearing liabilities	54,986			1,482		5.42	%	52,107			1,242		4.81	%
Total Interest-bearing Liabilities	5,868,190			89,448		3.06	%	5,300,466			51,322		1.95	%
Noninterest-bearing liabilities	2,384,596							2,632,964
Shareholders' equity	1,296,892							1,218,553
Total Liabilities and Shareholders' Equity	$	9,549,678						$	9,151,983
Net Interest Income (FTE) (non-GAAP) (1)(2)				$	168,446						$	178,108
Net Interest Margin (FTE) (non-GAAP) (1)(2)						3.84	%						4.27	%

(1) Tax-exempt interest income is on an FTE basis (non-GAAP) using the statutory federal corporate income tax rate of 21 percent.

(2) Taxable investment income is adjusted for the dividend-received deduction for equity securities.

(3) Nonaccruing loans are included in the daily average loan amounts outstanding.

Net interest income on an FTE basis (non-GAAP) decreased $4.5 million, or 5.1 percent, and $9.7 million, or 5.4 percent, for the three and six months ended June 30, 2024 compared to the same periods in 2023. The net interest margin, or NIM, on an FTE basis (non-GAAP) decreased 37 and 43 basis points for the three and six months ended June 30, 2024 compared to the same periods in 2023. The decreases in both net interest income and NIM on an FTE basis (non-GAAP) were primarily due to the impact of higher interest rates on total interest-bearing liabilities. While higher interest rates positively impacted interest income and rates on interest-earning assets, it was more than offset by higher interest expense and rates on interest-bearing liabilities. Additionally, there was a significant shift in the funding mix to higher costing money market and certificates of deposit accounts.

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Interest income on an FTE basis (non-GAAP) increased $11.5 million and $28.5 million for the three and six months ended June 30, 2024 compared to the same periods in 2023. The increase in interest income on an FTE basis (non-GAAP) was primarily due to higher interest rates on interest-earning assets. Average loan balances increased $395.5 million and $431.6 million for the three and six months ended June 30, 2024 compared to the same periods in 2023. The average yield on loan balances increased 28 and 36 basis points for the three and six months ended June 30, 2024 compared to the same periods in 2023 due to higher interest rates. Overall, the FTE rate (non-GAAP) on interest-earning assets increased 30 and 39 basis points for the three and six months ended June 30, 2024 compared to the same periods in 2023.

Interest expense increased $16.0 million and $38.1 million for the three and six months ended June 30, 2024 compared to the same periods in 2023. The increase in interest expense was primarily due to higher interest rates, a shift in our customer deposit mix to higher costing products and higher deposit volume. Average interest-bearing deposits increased $731.2 million and $710.1 million, of which $331.5 million and $354.6 million was brokered deposits, for the three and six months ended June 30, 2024 compared to the same periods in 2023. Average borrowings decreased $266.1 million and $145.2 million for the three and six months ended June 30, 2024 compared to the same periods in 2023 primarily due to increased deposit balances. Overall, the cost of interest-bearing liabilities increased 92 and 111 basis points for the three and six months ended June 30, 2024 compared to the same periods in 2023.

The following table sets forth for the periods presented a summary of the changes in interest earned and interest paid resulting from changes in volume and changes in rates:



	Three Months Ended June 30, 2024 Compared to June 30, 2023						Six Months Ended June 30, 2024 Compared to June 30, 2023
(dollars in thousands)	Volume (4)		Rate (4)		Total		Volume (4)		Rate (4)		Total
Interest earned on:
Interest-bearing deposits with banks	$	149	$	(61)	$	88	$	181	$	491	$	672
Securities, at fair value (1)(2)	$	(138)	$	946	$	808	$	(351)	$	1,687	$	1,336
Loans held for sale	$	(1)	$	—	$	(1)	$	—	$	—	$	—
Commercial real estate	$	2,390	$	2,777	$	5,167	$	5,534	$	7,085	$	12,619
Commercial and industrial	$	(1,401)	$	903	$	(498)	$	(2,809)	$	3,564	$	755
Commercial construction	$	(180)	$	163	$	(17)	$	(611)	$	655	$	44
Total Commercial Loans	$	810	$	3,843	$	4,652	$	2,114	$	11,304	$	13,418
Residential mortgage	$	3,377	$	1,834	$	5,211	$	7,055	$	3,729	$	10,784
Home equity	$	(42)	$	640	$	598	$	(74)	$	1,875	$	1,801
Installment and other consumer	$	(275)	$	86	$	(189)	$	(504)	$	334	$	(170)
Consumer construction	$	319	$	308	$	627	$	597	$	471	$	1,068
Total Consumer Loans	$	3,379	$	2,868	$	6,247	$	7,074	$	6,409	$	13,483
Total Portfolio Loans	$	4,189	$	6,711	$	10,899	$	9,188	$	17,713	$	26,901
Total Loans (1)(3)	$	4,188	$	6,711	$	10,898	$	9,188	$	17,713	$	26,901
Total other earning assets	$	(307)	$	(12)	$	(319)	$	(459)	$	11	$	(448)
Change in Interest Earned on Interest-earning Assets	$	3,892	$	7,584	$	11,475	$	8,559	$	19,902	$	28,461
Interest paid on:
Interest-bearing demand	$	(36)	$	1,125	$	1,089	$	(23)	$	2,759	$	2,736
Money market	$	1,801	$	5,385	$	7,186	$	2,924	$	11,575	$	14,499
Savings	$	(116)	$	713	$	597	$	(230)	$	1,503	$	1,273
Certificates of deposit	$	4,108	$	6,546	$	10,654	$	7,416	$	15,361	$	22,777
Total Interest-bearing Deposits	$	5,757	$	13,769	$	19,526	$	10,087	$	31,198	$	41,285

Short-term borrowings	$	(3,588)	$	(200)	$	(3,788)	$	(3,990)	$	175	$	(3,815)
Long-term borrowings	$	63	$	37	$	100	$	281	$	163	$	444
Junior subordinated debt securities	$	(97)	$	66	$	(31)	$	(191)	$	163	$	(28)
Total Borrowings	$	(3,622)	$	(97)	$	(3,719)	$	(3,900)	$	501	$	(3,399)
Other interest-bearing liabilities	$	103	$	50	$	153	$	69	$	170	$	239
Change in Interest Paid on Interest-bearing Liabilities	$	2,238	$	13,722	$	15,960	$	6,256	$	31,869	$	38,125
Change in Net Interest Income	$	1,654	$	(6,138)	$	(4,485)	$	2,303	$	(11,967)	$	(9,664)

(1) Tax-exempt income is on an FTE basis (non-GAAP) using the statutory federal corporate income tax rate of 21 percent.

(2) Taxable investment income is adjusted for the dividend-received deduction for equity securities.

(3) Nonaccruing loans are included in the daily average loan amounts outstanding.

(4) Changes to rate/volume are allocated to both rate and volume on a proportionate dollar basis.

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S&T BANCORP, INC. AND SUBSIDIARIES

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Provision for Credit Losses

The provision for credit losses includes a provision for losses on loans and on unfunded commitments. The provision for credit losses fluctuates based on changes in loan balances, risk ratings, net loan charge-offs/recoveries, the macro environment and our Current Expected Credit Loss, or CECL, forecast. The provision for credit losses decreased $10.1 million and $8.5 million to $0.4 million and $3.0 for the three and six months ended June 30, 2024, compared to $10.5 million and $11.5 million for the same periods in 2023. The decrease in the provision for credit losses for the three months ended June 30, 2024 compared to the same period in 2023 was primarily due to lower net charge-offs. The decrease in the provision for credit losses for the six months ended June 30, 2024 compared to the same period in 2023 was primarily due to reductions in our special mention and substandard loans, which lowered the quantitative reserve. Partially offsetting the decrease in the provision for credit losses was the addition of $3.6 million of specific reserves for loans individually evaluated related to two commercial relationships, which occurred during the three months ended June 30, 2024. Additionally, the provision for credit losses included reductions of $0.5 million and $1.3 million for the reserve for unfunded commitments for the three and six months ended June 30, 2024 compared to an increase of $1.9 million and $1.7 million for the same periods in 2023.

For the three and six months ended June 30, 2024, we had net loan recoveries of $0.4 million and net loan charge-offs of $6.2 million compared to net loan charge-offs of $11.0 million and $5.9 million for the same periods in 2023. The $0.4 million of net loan recoveries during the three months ended June 30, 2024 was the result of loan charge-offs of $0.8 million, which was offset by recoveries of $1.2 million. The most significant charge-off during the six months ended June 30, 2024 related to a $16.3 million CRE relationship that had a $3.2 million charge-off. Offsetting loan charge-offs of $16.7 million during the six months ended June 30, 2023 was a $9.3 million recovery related to a 2020 customer fraud. Refer to the "Allowance for Credit Losses" section of this MD&A for further details.

Noninterest Income




	Three Months Ended June 30,												Six Months Ended June 30,
(dollars in thousands)	2024			2023			$ Change			% Change			2024			2023			$ Change			% Change
Net loss on sale of securities		$	(3,150)		$	—		$	(3,150)		—	%		$	(3,147)		$	—		$	(3,147)		—	%
Debit and credit card		4,713			4,645			68			1.5	%		8,948			9,018			(70)			(0.8)	%
Service charges on deposit accounts		4,089			3,928			161			4.1	%		7,917			8,004			(87)			(1.1)	%
Wealth management		2,995			3,185			(190)			(6.0)	%		6,037			6,133			(96)			(1.6)	%
Mortgage banking		254			289			(35)			(12.1)	%		531			590			(59)			(10.0)	%

Other noninterest income		4,404			2,144			2,260			105.4	%		5,849			3,636			2,213			60.9	%
Total Noninterest Income		$	13,305		$	14,191		$	(886)		(6.2)	%		$	26,135		$	27,381		$	(1,246)		(4.6)	%

Noninterest income decreased $0.9 million and $1.2 million to $13.3 million and $26.1 million for the three and six months ended June 30, 2024 compared to the same periods in 2023. Other noninterest income increased $2.3 million for the three months ended June 30, 2024 and $2.2 million for the six months ended June 30, 2024. This increase was primarily due to a fair value adjustment of $3.2 million from the Visa exchange offer for Visa Class B-1 common stock, offset by a gain on OREO of $0.6 million in the second quarter of 2023. A loss on the sale of securities of $3.2 million was recognized during the second quarter of 2024 related to the repositioning of $49.0 million of securities into longer duration higher-yielding securities.

Noninterest Expense




	Three Months Ended June 30,												Six Months Ended June 30,
(dollars in thousands)	2024			2023			$ Change			% Change			2024		2023			$ Change			% Change
Salaries and employee benefits		$	30,388		$	25,391		$	4,997		19.7	%	$	59,900		$	52,992		$	6,908		13.0	%
Data processing and information technology		4,215			4,177			38			0.9	%	9,169			8,435			734			8.7	%
Occupancy		3,649			3,710			(61)			(1.6)	%	7,519			7,545			(26)			(0.3)	%
Furniture, equipment and software		3,382			3,192			190			6.0	%	6,854			6,053			801			13.2	%
Marketing		1,404			1,459			(55)			(3.8)	%	3,347			3,312			35			1.1	%
Other taxes		1,433			1,322			111			8.4	%	3,304			3,112			192			6.2	%
Professional services and legal		1,403			2,069			(666)			(32.2)	%	3,123			3,890			(767)			(19.7)	%
FDIC insurance		1,053			1,032			21			2.0	%	2,102			2,044			58			2.8	%

Other		6,681			7,281			(600)			(8.2)	%	12,810			13,949			(1,139)			(8.2)	%
Total Noninterest Expense		$	53,608		$	49,633		$	3,975		8.0	%	$	108,128		$	101,332		$	6,796		6.7	%

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S&T BANCORP, INC. AND SUBSIDIARIES

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Noninterest expense increased $4.0 million to $53.6 million for the three months ended June 30, 2024 and increased $6.8 million to $108.1 million for the six months ended June 30, 2024 compared to the same periods in 2023. Salaries and employee benefits increased for both the three and six months ended June 30, 2024 due to higher salary expense related to annual merit increases, inflationary wage pressure, the acquisition of new talent, higher incentives and medical costs. Other noninterest expense decreased $0.6 million and $1.1 million for the three and six months ended June 30, 2024 primarily due to the adoption of PAM. Amortization expense related to tax credit equity investments is included in income tax expense for 2024, while included in noninterest expense for 2023, Professional services and legal expense decreased $0.7 million for the three months and $0.8 million for the six months ended June 30, 2024 due to expiring consulting engagements and a decrease in legal expenses. Furniture, equipment and software increased $0.2 million for the three months and $0.8 million for the six months ended June 30, 2024 due to software and technology investments. Data processing and information technology increased $0.7 million for the six months ended June 30, 2024 due to additional services provided through our third party vendor.

Provision for Income Taxes

The provision for income taxes increased $0.8 million to $8.5 million for the three months ended June 30, 2024 and decreased $0.8 million to $16.4 million for the six months ended June 30, 2024 compared to $7.7 million and $17.2 million for the same periods in 2023. The increase in our income tax provision for the three months ended June 30, 2024 was primarily due to the adoption of the PAM on January 1, 2024. The decrease in our income tax provision for the six months ended June 30, 2024 was primarily due to a $9.5 million decrease in income before taxes that was partially offset by the adoption of PAM in 2024 compared to 2023.

The effective tax rate, which is total tax expense as a percentage of income before taxes, was 19.8 percent and 20.0 percent for the three and six months ended June 30, 2024, compared to 18.2 percent and 18.8 percent in the same periods in 2023. The increase in the effective tax rate for the three and six months ended June 30, 2024 was primarily due to the adoption of the PAM related to tax credit equity investments on January 1, 2024. Under the PAM, amortization expense related to tax credit equity investments is included in income tax expense for the three and six months ended June 30, 2024, and included in other noninterest expense for the same periods in 2023.

Financial Condition as of June 30, 2024

Total assets were $9.6 billion at both June 30, 2024 and December 31, 2023. Total portfolio loans remained relatively unchanged at $7.7 billion at June 30, 2024 and December 31, 2023. Loan volume has slowed due to higher interest rates and an uncertain macro environment. Securities remained unchanged at $1.0 billion at June 30, 2024 and December 31, 2023. The bond portfolio was in a net unrealized loss position of $84.6 million at June 30, 2024, compared to a net unrealized loss position of $82.0 million at December 31, 2023. The increase in the net unrealized loss position of the bond portfolio of $2.6 million was primarily due to changes in interest rates.

Total deposits increased $158.6 million with customer deposits increasing $232.9 million, or 3.26 percent, at June 30, 2024 compared to December 31, 2023. The increase in customer deposits is the result of our continued focus on the deposit franchise. The pace of customers moving deposits to higher costing deposit types has moderated compared to the prior year. Total borrowings decreased $140.2 million, or 27.84 percent, to $363.4 million at June 30, 2024 primarily due to deposit growth, compared to $503.6 million at December 31, 2023.

Total shareholders’ equity increased by $38.0 million to $1.3 billion at June 30, 2024, compared to December 31, 2023. The increase was primarily due to net income of $65.6 million, offset by dividends of $25.3 million and other comprehensive loss of $3.0 million.

Securities Activity





(dollars in thousands)	June 30, 2024			December 31, 2023			$ Change
U.S. Treasury securities		$	113,449		$	133,786		$	(20,337)
Obligations of U.S. government corporations and agencies		24,786			32,513			(7,727)
Collateralized mortgage obligations of U.S. government corporations and agencies		519,325			460,939			58,386
Residential mortgage-backed securities of U.S. government corporations and agencies		35,298			38,177			(2,879)
Commercial mortgage-backed securities of U.S. government corporations and agencies		256,540			273,425			(16,885)

Obligations of states and political subdivisions		24,441			30,468			(6,027)
Available-for-Sale Debt Securities		973,839			969,308			4,531
Equity securities		4,119			1,083			3,036
Total Securities Available for Sale		$	977,958		$	970,391		$	7,567

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S&T BANCORP, INC. AND SUBSIDIARIES

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

We invest in various securities in order to maintain a source of liquidity, to satisfy various pledging requirements, to increase net interest income and as a tool of ALCO to reposition the balance sheet for interest rate risk purposes. Securities are subject to market risks that could negatively affect the level of liquidity available to us. Security purchases are subject to an investment policy approved annually by our Board of Directors and administered through ALCO and our treasury function. Securities increased by $7.6 million at June 30, 2024 to $978.0 million, compared to $970.4 million at December 31, 2023. During the three months ended June 30, 2024, we repositioned $49.0 million of our securities portfolio, selling shorter duration U.S. Treasury securities and commercial mortgage-backed securities and replacing them with collateralized mortgage obligations with a longer duration and higher yield.

At June 30, 2024, our bond portfolio was in a net unrealized loss position of $84.6 million compared to a net unrealized loss position of $82.0 million at December 31, 2023. At June 30, 2024, our bond portfolio had gross unrealized losses of $85.1 million and $0.5 million in gross unrealized gains, compared to December 31, 2023, when total gross unrealized losses were $83.8 million offset by gross unrealized gains of $1.8 million.

Loan Composition

The following table summarizes our loan portfolio as of the dates presented:



	June 30, 2024				December 31, 2023

(dollars in thousands)	Amount		% of Total		Amount		% of Total		$ Change		% Change
Commercial
Commercial real estate	$	3,347,699	43.4	%	$	3,357,603	43.9	%	$	(9,904)	(0.3)	%
Commercial and industrial	1,611,183		20.9	%	1,642,106		21.5	%	(30,923)		(1.9)	%
Commercial construction	380,128		4.9	%	363,284		4.7	%	16,844		4.6	%
Total Commercial Loans	5,339,010		69.2	%	5,362,993		70.1	%	(23,983)		(0.4)	%
Consumer
Consumer real estate	2,271,900		29.5	%	2,175,451		28.4	%	96,449		4.4	%
Other consumer	102,660		1.3	%	114,897		1.5	%	(12,237)		(10.7)	%
Total Consumer Loans	2,374,560		30.8	%	2,290,348		29.9	%	84,212		3.7	%
Total Portfolio Loans	$	7,713,570	100.0	%	$	7,653,341	100.0	%	60,229		0.8	%

The loan portfolio represents the most significant source of interest income for us. The risk that borrowers will be unable to pay such obligations is inherent in the loan portfolio. Other conditions, such as downturns in the borrower’s industry or the overall economic climate, can significantly impact the borrower’s ability to pay.

Total portfolio loans were $7.7 billion at both June 30, 2024 and December 31, 2023. As of June 30, 2024, 64 percent of our total loans were variable rate loans and 36 percent were fixed rate loans, compared to 65 percent variable rate and 35 percent fixed rate at December 31, 2023. Commercial loans, including CRE, C&I and commercial construction, comprised 69.2 percent of total portfolio loans at June 30, 2024 and 70.1 percent at December 31, 2023. The commercial loan portfolio decreased $24.0 million at June 30, 2024 compared to December 31, 2023, primarily due to a decrease of $30.9 million in C&I, offset by an increase of $16.8 million in commercial construction. Loan volume has slowed due to higher interest rates and an uncertain macro environment.

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S&T BANCORP, INC. AND SUBSIDIARIES

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Our multifamily and office segments are the most significant CRE and commercial construction concentrations within our portfolio. Approximately 95 percent of multifamily and 90 percent of office CRE loans are located within our market area, which includes Pennsylvania and the contiguous states of Ohio, New York, West Virginia, New Jersey, Delaware and Maryland.

In the CRE segment, multifamily represented $605.4 million, or 7.8 percent of total portfolio loans, at June 30, 2024, compared to $569.4 million, or 7.4 percent, at December 31, 2023. The average loan size of multifamily CRE is $1.0 million, with an average loan-to-value of 58 percent. There were no special mention loans and $6.9 million of substandard loans in the multifamily CRE segment at June 30, 2024, compared to special mention loans of $3.8 million and substandard loans of $13.0 million at December 31, 2023. There were no nonperforming multi-family loans at June 30, 2024 and December 31, 2023.

Office CRE was $462.4 million, or 6.0 percent of total portfolio loans, at June 30, 2024, compared to $480.5 million, or 6.3 percent, at December 31, 2023. The average loan size of office CRE is $1.1 million, with an average loan-to-value of 56 percent. Special mention loans in the office CRE segment were $16.0 million and substandard loans were $2.1 million at June 30, 2024, compared to special mention loans of $9.1 million and substandard loans of $2.5 million at December 31, 2023. There was $0.4 million of nonperforming office loans at June 30, 2024 and $0.5 million at December 31, 2023.

In addition, within the commercial construction segment, multifamily represented $130.7 million, or 1.7 percent of total portfolio loans, at June 30, 2024, compared to $119.0 million, or 1.6 percent, at December 31, 2023. Commercial construction office was $28.7 million, or 0.4 percent of total portfolio loans, at June 30, 2024, compared to $36.0 million, or 0.5 percent, at December 31, 2023. There were no special mention or substandard commercial construction loans within our multifamily or office segments for the periods presented.

Consumer loans represent 30.8 percent of our total portfolio loans at June 30, 2024 and 29.9 percent at December 31, 2023. The consumer loan portfolio increased $84.2 million at June 30, 2024, primarily due to growth in our consumer real estate portfolio of $96.4 million compared to December 31, 2023. Consistent with 2023, we continue to retain consumer real estate loans on our balance sheet as portfolio loans, versus selling these loans due to the loan pricing in the secondary market .

Allowance for Credit Losses

We maintain an ACL at a level determined to be adequate to absorb estimated expected credit losses within the loan portfolio over the contractual life of an instrument that considers our historical loss experience, current conditions and forecasts of future economic conditions as of the balance sheet date. We develop and document a systematic ACL methodology based on the following portfolio segments: 1) CRE, 2) C&I, 3) Commercial Construction, 4) Business Banking, 5) Consumer Real Estate and 6) Other Consumer. Refer to Part 1. Financial Information, Note 5 Loans and Allowance for Credit Losses for details on our portfolio segments.

The following table presents activity in the ACL for the periods presented:


	Six Months Ended June 30, 2024
(dollars in thousands)	Commercial Real Estate		Commercial and Industrial		Commercial Construction		Business Banking		Consumer Real Estate		Other Consumer		Total Loans
Allowance for credit losses on loans:
Balance at beginning of period	$	37,886	$	34,538	$	5,382	$	12,858	$	14,663	$	2,639	$	107,966
Provision for credit losses on loans (1)	3,938		532		(35)		(1,862)		1,089		723		4,385
Charge-offs	(5,205)		(1,128)		—		(194)		(471)		(786)		(7,784)
Recoveries	458		793		—		81		95		156		1,583
Net (Charge-offs)/ Recoveries	(4,747)		(335)		—		(113)		(376)		(630)		(6,201)
Balance at End of Period	$	37,077	$	34,735	$	5,347	$	10,883	$	15,376	$	2,732	$	106,150
(1) Excludes the provision for credit losses for unfunded commitments.

The following table presents key ACL ratios for the periods presented:


	June 30, 2024		December 31, 2023
Ratio of net charge-offs to average loans outstanding (1)	0.16	%	0.18	%
Allowance for credit losses as a percentage of total portfolio loans	1.38	%	1.41	%
Allowance for credit losses to nonaccrual loans	305	%	471	%

(1) Year-to-date net charge-offs annualized

Net loan charge-offs were $6.2 million, or 0.16 percent of average loans, for the six months ended June 30, 2024. Refer to the "Provision for Credit Losses" section of this MD&A for further details.

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S&T BANCORP, INC. AND SUBSIDIARIES

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The ACL was $106.2 million, or 1.38 percent of total portfolio loans, at June 30, 2024, compared to $108.0 million, or 1.41 percent of total portfolio loans, at December 31, 2023. The decrease in the ACL of $1.8 million was primarily related to decreased exposure in our healthcare portfolio, which was partially offset by the addition of $3.6 million in specific reserves for loans individually assessed related to two commercial customers during the three months ended June 30, 2024.

Substandard loans decreased $33.9 million to $139.4 million at June 30, 2024, compared to $173.3 million at December 31, 2023. The decrease in substandard loans was primarily due to loan payoffs and commercial charge-offs. Special mention loans decreased $16.1 million to $119.7 million at June 30, 2024, compared to $135.8 million at December 31, 2023. The decrease in special mention loans was primarily due to risk rating upgrades in our CRE healthcare portfolio.

Our allowance on unfunded loan commitments and letters of credit provide for the risk of expected loss in these arrangements. The allowance is computed using a methodology similar to that used to determine the ACL for loans, modified to take into account the probability of a draw-down on the commitment. The provision for credit losses on unfunded loan commitments is included in the provision for credit losses on the Condensed Consolidated Statements of Comprehensive Income. The allowance for unfunded loan commitments decreased $1.3 million to $5.5 million at June 30, 2024, compared to $6.8 million at December 31, 2023. The decrease was due to decreased loss rates and a reduction in unused commitments in our construction portfolio. The allowance for unfunded commitments is included in other liabilities in the Consolidated Balance Sheets.

Nonperforming assets, or NPA's, consist of nonaccrual loans and OREO. The following represents NPA's as of the dates presented:


(dollars in thousands)	June 30, 2024				December 31, 2023				$ Change
Nonaccrual Loans
Commercial real estate		$	15,090			$	7,267			$	7,823
Commercial and industrial		7,075				3,244				3,831
Commercial construction		4,960				4,960				—
Consumer real estate		7,502				7,146				356
Other Consumer		230				330				(100)
Total Nonaccrual Loans		34,857				22,947				11,910
OREO		95				75				20
Total Nonperforming Assets		$	34,952			$	23,022			$	11,930
Asset Quality Ratios:
Nonaccrual loans as a percent of total portfolio loans		0.45		%		0.30		%
Nonperforming assets as a percent of total portfolio loans plus OREO		0.45		%		0.30		%

Our policy is to place loans in all categories in nonaccrual status when collection of interest or principal is doubtful, or generally when interest or principal payments are 90 days or more past the contractual due date. Nonaccrual loans increased $12.0 million to $34.9 million at June 30, 2024, compared to $22.9 million at December 31, 2023. The increase in nonaccrual loans primarily related to the addition of a $16.3 million CRE relationship, which had a $3.2 million partial charge-off during the three months ended March 31, 2024. A specific reserve of $2.9 million was added for this relationship during the three months ended June 30, 2024 based on uncertainty surrounding a potential sale of the company. Partially offsetting the increase in nonaccrual loans at June 30, 2024 was the payoff of a $5.9 million CRE loan and a $3.4 million CRE loan was returned to accruing status.

Deposits

Deposits are our primary source of funds. We have a well-diversified deposit base with a balance mix of 58.4 percent personal, 32.9 percent business, 4.8 percent public funds and 3.9 percent brokered at June 30, 2024.


	June 30, 2024				December 31, 2023
(dollars in thousands)	Amount		% of Deposits		Amount		% of Deposits		$ Change		% Change
Personal	$	4,482,451	58.4	%	$	4,244,386	56.4	%	$	238,065	5.6	%
Business	2,530,226		32.9	%	2,565,853		34.1	%	(35,627)		(1.4)	%
Public funds	366,330		4.8	%	335,876		4.5	%	30,454		9.1	%
Brokered	301,329		3.9	%	375,654		5.0	%	(74,325)		(19.8)	%
Total Deposits	$	7,680,336	100.0	%	$	7,521,769	100.0	%	$	158,567	2.1	%

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S&T BANCORP, INC. AND SUBSIDIARIES

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following table presents the composition of deposits for the periods presented:


(dollars in thousands)	June 30, 2024			December 31, 2023			$ Change
Customer Deposits
Noninterest-bearing demand		$	2,206,589		$	2,221,942		$	(15,353)
Interest-bearing demand		789,317			825,787			(36,470)
Money market		1,908,157			1,741,189			166,968
Savings		906,794			950,546			(43,752)
Certificates of deposit		1,568,150			1,406,652			161,498
Total Customer Deposits		7,379,007			7,146,116			232,891
Brokered Deposits

Money market		100,329			200,653			(100,324)
Certificates of deposit		201,000			175,000			26,000
Total Brokered Deposits		301,329			375,653			(74,324)

Total Deposits		$	7,680,336		$	7,521,769		$	158,567

Our total deposits increased $158.6 million at June 30, 2024, compared to December 31, 2023. Customer deposits increased $232.9 million compared to December 31, 2023, as a result of our focus on growing our deposit franchise. While we are still seeing movement by customers to higher cost certificates of deposit and money market accounts, the rate of customers moving deposits to higher costing deposit types has moderated compared to the prior year.

As a member of the IntraFi network, we are able to offer our customers insurance coverage on interest-bearing demand, money market and certificates of deposit balances in excess of the FDIC insurance limits. IntraFi balances decreased $5.6 million to $272.1 million at June 30, 2024, compared to $277.7 million at December 31, 2023. We had total uninsured deposits of $2.5 billion, or 32 percent of our total deposit base, at June 30, 2024 compared to $2.3 billion, or 30 percent or our total deposit base, at December 31, 2023.

Borrowings


(dollars in thousands)	June 30, 2024			December 31, 2023			$ Change

Short-term borrowings		$	275,000		$	415,000		$	(140,000)
Long-term borrowings		39,034			39,277			(243)
Junior subordinated debt securities		49,388			49,358			30
Total Borrowings		$	363,422		$	503,635		$	(140,213)

Borrowings are an additional source of funding for us. Total borrowings decreased $140.2 million to $363.4 million at June 30, 2024, compared to $503.6 million at December 31, 2023, primarily due to deposit growth.

Information pertaining to short-term borrowings is summarized in the table below for the six months ended June 30, 2024 and the twelve months ended December 31, 2023.



	Short-Term Borrowings

(dollars in thousands)	June 30, 2024			December 31, 2023
Balance at the period end	$	275,000		$	415,000
Average balance during the period	$	335,137		$	500,421
Average interest rate during the period	5.26		%	5.44		%
Maximum month-end balance during the period	$	465,000		$	630,000
Average interest rate at the period end	5.09		%	5.65		%

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S&T BANCORP, INC. AND SUBSIDIARIES

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Information pertaining to long-term borrowings and junior subordinated debt securities is summarized in the tables below for the three months ended June 30, 2024 and the twelve months ended December 31, 2023.



	Long-Term Borrowings

(dollars in thousands)	June 30, 2024			December 31, 2023
Balance at the period end	$	39,034		$	39,277
Average balance during the period	$	39,160		$	31,706
Average interest rate during the period	4.53		%	4.20		%
Maximum month-end balance during the period	$	39,237		$	39,589
Average interest rate at the period end	4.47		%	4.52		%

	Junior Subordinated Debt Securities

(dollars in thousands)	June 30, 2024			December 31, 2023
Balance at the period end	$	49,388		$	49,358
Average balance during the period	$	49,371		$	52,215
Average interest rate during the period	8.20		%	7.87		%
Maximum month-end balance during the period	$	49,388		$	54,483
Average interest rate at the period end	7.93		%	7.98		%

Liquidity and Capital Resources

Liquidity is defined as a financial institution’s ability to meet its cash and collateral obligations at a reasonable cost. Our primary future cash needs are centered on the ability to (i) satisfy the financial needs of depositors who may want to withdraw funds or of borrowers needing to access funds to meet their credit needs and (ii) to meet our future cash commitments under contractual obligations with third parties. In order to manage liquidity risk, our Board of Directors has delegated authority to ALCO for the formulation, implementation and oversight of liquidity risk management for S&T. The ALCO’s goal is to maintain adequate levels of liquidity at a reasonable cost to meet funding needs in both a normal operating environment and for potential liquidity stress events. The ALCO monitors and manages liquidity through various ratios, reviewing cash flow projections, performing stress tests and having a detailed contingency funding plan. The ALCO policy guidelines define graduated risk tolerance levels. If our liquidity position moves to a level that has been defined as high risk, specific actions are required, such as increased monitoring or the development of an action plan to reduce the risk position.

Our primary funding and liquidity source is a stable customer deposit base. We believe S&T has the ability to retain existing deposits and attract new deposits, mitigating any funding dependency on other more volatile funding sources. Refer to the "Financial Condition as of June 30, 2024 - Deposits" section of this MD&A, for additional discussion on deposits. Although deposits are the primary source of funds, we have identified various other funding sources that can be used as part of our normal funding program. Additional funding sources accessible to S&T include borrowing availability at the Federal Home Loan Bank of Pittsburgh, or FHLB, federal funds lines with other financial institutions and the brokered deposit market. We also have availability at the Federal Reserve Discount Window through the Borrower-in-Custody Program.

In response to the bank failures in March 2023, the Federal Reserve authorized additional funding availability to eligible depository institutions through the Federal Reserve Bank Term Funding Program, or BTFP. The temporary program was intended to help assure depositors that their institutions have an additional source of liquidity to meet their needs. Under the program, any collateral eligible for purchase by the Federal Reserve Banks in open market operations could be pledged, including U.S. Treasury securities, U.S. Agencies and U.S. Agency mortgage-backed securities. Collateral advances were equal to 100 percent of the par value of the collateral pledged with a term of up to one year. Interest was charged at a fixed rate equal to the one-year overnight index swap rate plus 10 basis points with no prepayment penalty. The BTFP ceased making new fundings on March 11, 2024.

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S&T BANCORP, INC. AND SUBSIDIARIES

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Available borrowing capacity exceeds uninsured deposits of $2.5 billion. The following table summarizes funding sources available as of the dates presented:


	June 30, 2024						December 31, 2023
(dollars in thousands)	Borrowing Capacity		Balance		Available		Borrowing Capacity		Balance		Available
FHLB	$	3,356,875	$	245,597	$	3,111,278	$	3,241,098	$	552,136	$	2,688,962
Borrower-in-Custody Program	730,570		—		730,570		769,653		—		769,653
Federal Reserve BTFP (1)	200,000		200,000		—		636,963		—		636,963
Total	$	4,287,445	$	445,597	$	3,841,848	$	4,647,714	$	552,136	$	4,095,578
(1) Program created by the Federal Reserve in March 2023, new loans under the program ended March 11, 2024.

We have contractual obligations representing required future payments on certificates of deposit, junior subordinated debt securities, short-term borrowings, long-term borrowings, operating and capital leases, funding commitments on tax credit equity investments and purchase obligations. See the Liquidity and Capital Resources portion of our Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2023 Form 10-K for more information on these future cash outflows. Total certificates of deposit increased $187.5 million to $1.8 billion at June 30, 2024, compared to December 31, 2023 and short-term borrowings decreased $140.0 million to $275.0 million at June 30, 2024, compared to December 31, 2023. Other than these changes, there have been no material changes to the contractual obligations previously disclosed in our 2023 Form 10-K.

An important component of our ability to effectively respond to potential liquidity stress events is maintaining a cushion of highly liquid assets. Highly liquid assets are those that can be converted to cash quickly to meet financial obligations. ALCO policy guidelines define a ratio of highly liquid assets to total assets by graduated risk tolerance levels of minimal, moderate and high. At June 30, 2024, S&T Bank had $742.3 million in highly liquid assets, which consisted primarily of $172.2 million in interest-bearing deposits with banks and $569.9 million in unpledged securities. This resulted in a highly liquid assets to total assets ratio of 7.7 percent at June 30, 2024.

We continue to maintain a strong capital position with o ur leverage ratio at 11.51 percent at June 30, 2024, compared to 11.21 percent at December 31, 2023 , both in excess of the well-capitalized regulatory guideline of 5.00 percent. We continue to be well-capitalized with a risk-based Common Equity Tier 1 ratio of 13.89 percent at June 30, 2024, compared to 13.37 percent at December 31, 2023 , both in excess of the well-capitalized regulatory guideline of 6.50 percent.

The following table summarizes capital amounts and ratios for S&T and S&T Bank as of the dates presented :


(dollars in thousands)	Adequately Capitalized		Well- Capitalized		June 30, 2024				December 31, 2023
					Amount		Ratio		Amount		Ratio
S&T Bancorp, Inc.
Tier 1 leverage	4.00	%	5.00	%	$	1,069,964	11.51	%	$	1,034,828	11.21	%
Common equity tier 1 to risk-weighted assets	4.50	%	6.50	%	1,045,964		13.89	%	1,010,828		13.37	%
Tier 1 capital to risk-weighted assets	6.00	%	8.00	%	1,069,964		14.21	%	1,034,828		13.69	%
Total capital to risk-weighted assets	8.00	%	10.00	%	1,189,224		15.79	%	1,154,376		15.27	%
S&T Bank
Tier 1 leverage	4.00	%	5.00	%	$	1,023,537	11.02	%	$	995,824	10.79	%
Common equity tier 1 to risk-weighted assets	4.50	%	6.50	%	1,023,537		13.60	%	995,824		13.18	%
Tier 1 capital to risk-weighted assets	6.00	%	8.00	%	1,023,537		13.60	%	995,824		13.18	%
Total capital to risk-weighted assets	8.00	%	10.00	%	1,142,730		15.18	%	1,115,315		14.76	%

On March 27, 2020, the regulators issued interim final rule, or IFR, “Regulatory Capital Rule: Revised Transition of the Current Expected Credit Losses Methodology for Allowances” in response to the disrupted economic activity due to the COVID-19 pandemic. The IFR provides financial institutions that adopted CECL during 2020 with the option to delay for two years the estimated impact of CECL on regulatory capital, followed by a three-year transition period to phase out the aggregate amount of the capital benefit provided by the initial two-year delay (“five-year transition”). We adopted CECL effective January 1, 2020 and elected to implement the five-year transition.

We have filed a shelf registration statement on Form S-3 under the Securities Act of 1933, as amended, with the SEC, which allows for the issuance of a variety of securities including debt and capital securities, preferred and common stock and warrants. We may use the proceeds from the sale of securities for general corporate purposes, which could include investments at the holding company level, investing in, or extending credit to subsidiaries, possible acquisitions and stock repurchases. As of June 30, 2024, we had not issued any securities pursuant to this shelf registration statement.

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S&T BANCORP, INC. AND SUBSIDIARIES

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk is defined as the degree to which changes in interest rates, foreign exchange rates, commodity prices or equity prices can adversely affect a financial institution’s earnings or capital. For most financial institutions, including S&T, market risk primarily reflects exposures to changes in interest rates. Interest rate fluctuations affect earnings by changing net interest income and other interest-sensitive income and expense levels. Interest rate changes also affect capital by changing the net present value of a bank’s future cash flows, and the cash flows themselves, as rates change. Accepting this risk is a normal part of banking and can be an important source of profitability and enhancing shareholder value. However, excessive interest rate risk can threaten a bank’s earnings, capital, liquidity and solvency. Our sensitivity to changes in interest rate movements is continually monitored by the ALCO. The ALCO monitors and manages market risk through rate shock analyses, economic value of equity, or EVE, analyses and by performing stress tests and simulations to mitigate earnings and market value fluctuations due to changes in interest rates.

Rate shock analyses results are compared to a base case to provide an estimate of the impact that market rate changes may have on 12 and 24 months of pretax net interest income. The base case and rate shock analyses are performed on a static balance sheet. A static balance sheet is a no growth balance sheet in which all maturing and/or repricing cash flows are reinvested in the same product at the existing product spread. Rate shock analyses assume an immediate parallel shift in market interest rates and also include management assumptions regarding the impact of interest rate changes on non-maturity deposit products (noninterest-bearing demand, interest-bearing demand, money market and savings) and changes in the prepayment behavior of loans and securities with optionality. S&T policy guidelines limit the change in pretax net interest income over 12 and 24 month horizons using rate shocks in increments of +/- 100 basis points. Policy guidelines define the percentage change in pretax net interest income by graduated risk tolerance levels of minimal, moderate and high.

In order to monitor interest rate risk beyond the 24 month time horizon of rate shocks on pretax net interest income, we also perform EVE analyses. EVE represents the present value of all asset cash flows minus the present value of all liability cash flows. EVE change results are compared to a base case to determine the impact that market rate changes may have on our EVE. As with rate shock analyses on pretax net interest income, EVE analyses incorporate management assumptions regarding prepayment behavior of fixed rate loans and securities with optionality and the behavior and value of non-maturity deposit products. S&T policy guidelines limit the change in EVE using rate shocks in increments of +/- 100 basis points. Policy guidelines define the percentage change in EVE by graduated risk tolerance levels of minimal, moderate and high.

The table below reflects the rate shock analyses results for the 1-12 and 13-24 month periods of pretax net interest income and EVE.


	June 30, 2024			December 31, 2023
	1 - 12 Months	13 - 24 Months	% Change in EVE	1 - 12 Months	13 - 24 Months	% Change in EVE
Change in Interest Rate (basis points)	% Change in Pretax Net Interest Income	% Change in Pretax Net Interest Income		% Change in Pretax Net Interest Income	% Change in Pretax Net Interest Income
400	4.8	6.8	(32.5)	3.5	7.6	(31.4)
300	3.3	4.7	(24.4)	2.4	5.4	(23.5)
200	1.6	2.7	(15.7)	1.2	3.4	(15.2)
100	0.4	1.3	(7.2)	0.2	1.6	(7.3)
-100	(3.9)	(5.1)	3.5	(3.5)	(5.1)	3.7
-200	(5.4)	(7.7)	4.2	(4.2)	(6.7)	3.8
-300	(8.0)	(12.5)	0.1	(6.6)	(11.2)	(0.5)
-400	(11.4)	(18.3)	(9.5)	(9.3)	(15.1)	(13.7)

The results from the rate shock analyses on net interest income are consistent with having an asset sensitive balance sheet. Having an asset sensitive balance sheet means more assets than liabilities will reprice during the measured time frames. The implications of an asset sensitive balance sheet will differ depending upon the change in market interest rates. For example, with an asset sensitive balance sheet in a declining interest rate environment, more assets than liabilities will decrease in rate. This situation could result in a decrease in net interest income and operating income. Conversely, with an asset sensitive balance sheet in a rising interest rate environment, more assets than liabilities will increase in rate. This situation could result in an increase in net interest income and operating income.

Our rate shock analyses show larger changes in the percentage change in pretax net interest income in both the rates up and rates down scenarios when comparing June 30, 2024 to December 31, 2023 primarily due to lower levels of short term borrowings and brokered deposits that contribute to a higher level of asset sensitivity. Our EVE analyses remain relatively unchanged in the rates up scenarios. The percentage change in our EVE show improvement in rates down scenarios when comparing June 30, 2024 to December 31, 2023. These changes are mainly the result of changes to our funding mix.

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S&T BANCORP, INC. AND SUBSIDIARIES

In addition to rate shocks and EVE analyses, we perform a market risk stress test at least annually. The market risk stress test includes sensitivity analyses and simulations. Sensitivity analyses are performed to help us identify which model assumptions cause the greatest impact on pretax net interest income. Sensitivity analyses may include changing prepayment behavior of loans and securities with optionality and the impact of interest rate changes on non-maturity deposit products. Simulation analyses may include the potential impact of rate changes other than the policy guidelines, yield curve shape changes, significant balance mix changes and various growth scenarios.

Item 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of S&T’s Chief Executive Officer, or CEO, and Chief Financial Officer, or CFO (its principal executive officer and principal financial officer, respectively), management has evaluated the effectiveness of the design and operation of S&T’s disclosure controls and procedures as of June 30, 2024. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934, as amended, or the Exchange Act, is recorded, processed, summarized and reported within the time periods required by the Securities and Exchange Commission, or the SEC, and that such information is accumulated and communicated to S&T’s management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.

Based on and as of the date of such evaluation, our CEO and CFO concluded that the design and operation of our disclosure controls and procedures were effective in all material respects, as of the end of the period covered by this report.

Changes in Internal Control over Financial Reporting

During the quarter ended June 30, 2024, there were no changes made to S&T’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that materially affected, or are reasonably likely to materially affect, S&T’s internal control over financial reporting.

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S&T BANCORP, INC. AND SUBSIDIARIES

PART II

OTHER INFORMATION

Item 1. Legal Proceedings

None

Item 1A. Risk Factors

There have been no material changes to the risk factors that we have previously disclosed in Part I, Item 1A – “Risk Factors” in our 2023 Form 10-K for the year ended December 31, 2023, as filed with the SEC on February 27, 2024.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Purchases of Equity Securities

The following table is a summary of our purchases of common stock during the second quarter of 2024:


Period	Total number of shares purchased	Average price paid per share	Total number of shares purchased as part of publicly announced plan (1)	Approximate dollar value of shares that may yet be purchased under the plan
				$50,000,000
04/01/2024-04/30/2024	—	$—	—	50,000,000

05/01/2024-05/31/2024	—	—	—	50,000,000

06/01/2024-06/30/2024	—	—	—	$50,000,000

( 1) On January 24, 2024, our Board of Directors authorized a new $50 million share repurchase plan. The new plan replaced the existing share repurchase plan effective immediately and is set to expire May 30, 2025. This repurchase authorization permits S&T to repurchase shares of S&T's common stock from time to time through a combination of open market and privately negotiated repurchases up to the authorized $50 million aggregate value of S&T's common stock. The specific timing, price and quantity of repurchases will be at the discretion of S&T and will depend on a variety of factors, including general market conditions, the trading price of the common stock, legal and contractual requirements and S&T’s financial performance. The repurchase plan does not obligate S&T to repurchase any particular number of shares. S&T expects to fund any repurchases from cash on hand and internally generated funds. Any share repurchases will not begin until permissible under applicable laws.

Item 3. Defaults Upon Senior Securities

None

Item 4. Mine Safety Disclosures

Not Applicable

Item 5. Other Information

(c) During the three and six months ended June 30, 2024, no director or Section 16 officer of the Company adopted , terminated or modified a ‘Rule 10b5-1 trading arrangement’ or ‘non-Rule 10b5-1 trading arrangement,’ as each term is defined in Item 408(a) of Regulation S-K.

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S&T BANCORP, INC. AND SUBSIDIARIES

Item 6. Exhibits


31.1			Rule 13a-14(a) Certification of the Chief Executive Officer
31.2			Rule 13a-14(a) Certification of the Chief Financial Officer
32			Rule 13a-14(b) Certification of the Chief Executive Officer and Chief Financial Officer
101.INS			XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH			XBRL Taxonomy Extension Schema
101.CAL			XBRL Taxonomy Extension Calculation Linkbase
101.DEF			XBRL Taxonomy Extension Definition Linkbase
101.LAB			XBRL Taxonomy Extension Label Linkbase
101.PRE			XBRL Taxonomy Extension Presentation Linkbase
104			Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibits 101)

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S&T BANCORP, INC. AND SUBSIDIARIES

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


			S&T Bancorp, Inc. (Registrant)

August 1, 2024			/s/ Mark Kochvar
			Mark Kochvar Senior Executive Vice President and Chief Financial Officer (Principal Financial Officer and Duly Authorized Signatory)

Exhibit 107

Calculation of Filing Fee Table

Form S-3

(Form Type)

S&T BANCORP, INC.

(Exact Name of Registrant as Specified in its Charter)

Table 1: Newly Registered Securities

Security Type

Security Class Title

Fee Calculation or Carry Forward Rule

Amount Registered

Proposed Maximum Offering Price Per Unit

Maximum Aggregate Offering Price

Fee Rate

Amount of Registration Fee

Carry Forward Form Type

Carry Forward File Number

Carry Forward Initial Effective Date

Filing Fee Previously Paid in Connection with

Unsold Securities to Be Carried Forward

Newly Registered Securities

Fees to Be Paid

(1)

Equity

Common Stock

Rule 457(r)

0.0001476

(2)

Equity

Preferred Stock, no par value

Rule 457(r)

0.0001476

(3)

Other

Depository Shares

Rule 457(r)

0.0001476

(4)

Debt

Debt Securities

Rule 457(r)

0.0001476

(5)

Other

Warrants

Rule 457(r)

0.0001476

(6)

Other

Units

Rule 457(r)

0.0001476

Fees Previously Paid

Carry Forward Securities

Total Offering Amounts

Total Fees Previously Paid

Total Fee Offsets

Net Fee Due


Fee Note #
(1)			An unspecified number of securities or aggregate principal amount, as applicable, is being registered as may from time to time be offered at unspecified prices, and, in addition, an unspecified number of additional shares of common stock is being registered as may be issued from time to time upon conversion of any debt securities that are convertible into common stock or pursuant to any anti-dilution adjustments with respect to any such convertible debt securities. In reliance on Rule 456(b) and Rule 457(r) under the Securities Act of 1933, as amended, the registrant is deferring payment of the entire registration
(2)			An unspecified number of securities or aggregate principal amount, as applicable, is being registered as may from time to time be offered at unspecified. In reliance on Rule 456(b) and Rule 457(r) under the Securities Act of 1933, as amended, the registrant is deferring payment of the entire registration fee required in connection with this registration
(3)			An unspecified number of securities or aggregate principal amount, as applicable, is being registered as may from time to time be offered at unspecified. In reliance on Rule 456(b) and Rule 457(r) under the Securities Act of 1933, as amended, the registrant is deferring payment of the entire registration fee required in connection with this registration


(4)			An unspecified number of securities or aggregate principal amount, as applicable, is being registered as may from time to time be offered at unspecified. In reliance on Rule 456(b) and Rule 457(r) under the Securities Act of 1933, as amended, the registrant is deferring payment of the entire registration fee required in connection with this registration
(5)			An unspecified number of securities or aggregate principal amount, as applicable, is being registered as may from time to time be offered at unspecified. In reliance on Rule 456(b) and Rule 457(r) under the Securities Act of 1933, as amended, the registrant is deferring payment of the entire registration fee required in connection with this registration
(6)			An unspecified number of securities or aggregate principal amount, as applicable, is being registered as may from time to time be offered at unspecified. In reliance on Rule 456(b) and Rule 457(r) under the Securities Act of 1933, as amended, the registrant is deferring payment of the entire registration fee required in connection with this registration

TABLE OF CONTENTS

Note 1. Basis Of Presentation Note 2. Earnings Per Share Note 3. Fair Value Measurements Note 4. Securities Note 5. Loans and Allowance For Credit Losses Note 6. Derivative Instruments and Hedging Activities Note 7. Tax Credit Equity Investments Note 8. Commitments and Contingencies Note 9. Other Comprehenisve Income (loss)Item 2. Management S Discussion and Analysis Of Financial Condition and Results Of Operations Item 3. Quantitative and Qualitative Disclosures About Market Risk Item 4. Controls and Procedures Part II Item 1. Legal Proceedings Item 1A. Risk Factors Item 2. Unregistered Sales Of Equity Securities and Use Of Proceeds Item 3. Defaults Upon Senior Securities Item 4. Mine Safety Disclosures Item 5. Other Information Item 6. Exhibits

Exhibits

31.1 Rule 13a-14(a) Certification of the Chief Executive Officer 31.2 Rule 13a-14(a) Certification of the Chief Financial Officer 32 Rule 13a-14(b) Certification of the Chief Executive Officer and Chief Financial Officer

STBA 10-Q Quarter ended June 30, 2024

Exhibits